WTO condemns the European Union for subsidies to Airbus

The World Trade Organization (WTO) has found that the European Union and certain Member States illegally subsidized Airbus, based in Toulouse. A WTO compliance panel has considered illegal subsidies of 22 billion dollars which caused “genuine and substantial” damage to the American Boeing.

According to the United States office at the WTO, the subsidies paid by Germany, France, United Kingdom and Spain to finance several projects were illegal, as were the 4 billion dollars paid for the new A350 XWB Airbus aircrafts. Furthermore, the WTO has accused the European Union of having complied with only two out of the 36 complaints received.

As far back as 2011, WTO had ordered the suspension of the above mentioned subsidies, which cost the American economy millions of dollars: as a consequence, Boeing could have suffered 400 lost sales between 2012 and 2013. For this reason, Boeing retains that the United States may claim 10 billion dollars damages from the EU as compensation for the subsidies paid to its competitor.

The decision does not contain sanctions and it is appealable. The European Union is likely to appeal against the decision on the basis of its “unsatisfying” reasons. In this context, it is worth recalling that a counter-complaint of the EU, concerning illegal USA subsidies to Boeing, is still pending before WTO.

Pietro Michea