WTO rul­ing largely clears US of un­fair Boe­ing sup­port

The Star Early Edition - - INTERNATIONAL - Tom Miles

THE WORLD Trade Or­gan­i­sa­tion (WTO) largely cleared the US of main­tain­ing un­fair sup­port for Boe­ing, but said it had failed to with­draw a tax break in its main plane mak­ing state that con­tin­ues to cause trade fire­works.

The rul­ing added an­other page to an ex­haust­ing 13-year-old bat­tle be­tween the transat­lantic plane giants just as a US tri­bunal agreed sep­a­rately to in­ves­ti­gate Boe­ing’s con­cerns about al­leged price-dump­ing by Canada’s Bom­bardier.

The WTO said the US had failed to re­move aid for Boe­ing, as al­leged in a trade com­plaint brought by the EU, but ruled that few of the sub­si­dies hurt EU in­ter­ests.

It found that one US sub­sidy pro­gramme, a busi­ness tax rate re­duc­tion in the state of Wash­ing­ton, where Boe­ing builds most of its air­craft, had had “ad­verse ef­fects”, in­volv­ing cus­tomers from the United Arab Emi­rates, Canada and Ice­land.

Both sides claimed vic­tory after the rul­ing, which is about whether Boe­ing com­plied with a 2012 de­ci­sion that it had re­ceived bil­lions of dol­lars of sub­si­dies in­clud­ing aid from space agency Nasa and tax breaks from Wash­ing­ton State.

US plans ap­peal

“The panel found only one state-level pro­gramme, which had an av­er­age value of $100110 mil­lion (R1.29-1.42 bil­lion) in the 2013-2015 pe­riod, to be con­trary to WTO rules. The US dis­agrees and plans to ap­peal this lim­ited find­ing,” the of­fice of the US Trade Rep­re­sen­ta­tive said.

Euro­pean plane­maker Air­bus in­sisted the US had not com­plied with the WTO’s ear­lier de­ci­sions in the case and claimed it had suf­fered $100bn of harm when com­bined with a fol­low-up com­plaint.

“The amount of money in­volved com­pletely dis­torts trade… and the WTO should make it clear that no gov­ern­ment or com­pany can escape from their in­ter­na­tional re­spon­si­bil­i­ties,” Air­bus chief ex­ec­u­tive Tom En­ders said.

The WTO said Boe­ing had failed to com­ply with part of the ear­lier 2012 rul­ing re­lat­ing to tax breaks in Wash­ing­ton state. Those tax breaks are now the sub­ject of a new case, hav­ing been ex­tended to cover Boe­ing’s new­est wide-body jet.

In Novem­ber, the WTO de­fined the tax break to help Boe­ing de­velop its new 777X jet as a pro­hib­ited sub­sidy. That de­ci­sion, con­tested by the US, is now work­ing its way through the WTO’s ap­peals tri­bunal.

The rul­ing is part of a se­ries of tit-for-tat transat­lantic com­plaints about air­craft sub­si­dies that to­gether make up the world’s largest trade dis­pute.

Bick­er­ing over fi­nanc­ing for the $120 bil­lion a year civil aero­space in­dus­try has widened in re­cent months as Brazil took Bom­bardier to the WTO and Boe­ing asked a faster U.S. tri­bunal to deal with its pric­ing com­plaint against the same com­pany. – Reuters

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