European Interest

WTO rules EU ignored request to remove all Airbus subsidies

Flickr/Tim Gallagher/CC BY-NC-ND 2.0

The European Union has ignored requests to halt all subsidies to planemaker Airbus, according to the World Trade Organization.

In its ruling on May 15, the WTO said the bloc had failed to remove support in the form of preferential government loans for the world’s largest airliner, the A380, and Europe’s newest long-haul plane, the A350, causing losses for Boeing and US aerospace workers.

The court confirmed that in May 2011 the EU and four of its member States (Germany, France, the UK, and Spain) conferred more than $18bn in subsidized financing to Airbus and had caused Boeing to lose sales of more than 300 aircraft and market share throughout the world.

As reported by the Reuters news agency, however, the Geneva watchdog dismissed US claims that loans for Airbus’s most popular models, the A320 and A330, were costing Boeing significant sales and in so doing narrowed the scope of one of the world’s longest and costliest trade spats.

Boeing is the largest American manufacturer of commercial jetliners.

Meanwhile, the report comes at a time of mounting trade tensions over US aluminium and steel tariffs and the impact on European firms of Washington’s decision to exit the Iran nuclear pact.

US Trade Representative Robert Lighthizer said in a statement the United States would slap countermeasures on European goods unless the EU fell into line.

Boeing predicted such tariffs could reach billions of dollars a year starting as early as 2019.

“This is expected to be the largest-ever WTO authorisation of retaliatory tariffs,” it said in a statement.

From Washington, Lighthizer said: “President Trump has been clear that we will use every available tool to ensure free and fair trade benefits American workers… Unless the EU finally takes action to stop breaking the rules and harming US interests, the United States will have to move forward with countermeasures on EU products.”

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