Trade org rejects most European claims against Boeing

EVERETT — The World Trade Organization (WTO) gave the United States — and Boeing — a key victory Friday in a long-running legal fight with the European Union over subsidies for airplane makers. The victory, though, was not a final or complete win for the U.S. and Boeing.

The decision followed on the WTO’s 2012 ruling that Boeing has received illegal subsidies. On Friday, a WTO panel determined that the U.S. has complied with nearly all parts of that earlier finding.

However, the panel said, part of Washington state’s 2003 aerospace tax incentives is still illegal. Between 2013 and 2015, Boeing saved an estimated $325 million from the state’s business tax reduction, according to the WTO.

The U.S. plans to appeal the WTO’s finding.

U.S. Trade Representative Robert Lighthizer also urged the E.U. to settle the subsidy dispute.

“The WTO report confirms what we have always said: The United States does not provide subsidies even remotely comparable to the uniquely large and uniquely harmful E.U. subsidies to Airbus,” Lighthizer said in a statement. “It is time for the E.U. to stop making excuses and instead to join us in negotiating a settlement to remove all WTO-inconsistent subsidies so that our world-class aircraft manufacturers can compete on a level playing field.”

Boeing and Airbus both claimed victory after Friday’s ruling.

“Today, the E.U. and Airbus suffered yet another resounding defeat in this decade-long dispute,” Boeing General Counsel Michael Luttig said in a statement. “It is finally time for them to comply with their global trade obligations and eliminate and remedy the $22 billion of launch aid and other illegal subsidies that are harming U.S. aerospace companies and American workers.”

In September, the WTO ruled that Airbus had received massive public and illegal support from several European countries. The U.S. brought those charges in 2004. A short while later, the E.U. countersued, alleging Boeing received huge subsidies as well. The E.U. also filed a complaint in 2015, alleging that Washington’s tax incentives passed in 2013 to land the 777X also are illegal.

After years of legal fighting, the two initial cases are inching closer and closer to final resolution.

Until then, the state is sitting tight, said Tara Lee, a spokeswoman for Gov. Jay Inslee, who pushed for the 2013 tax package.

With an appeal from the U.S. still pending, “it is too early to tell what actions the state might undertake in response to the ruling,” she said.

Jerry Cornfield contributed to this report.

Dan Catchpole: 425-339-3454; dcatchpole@heraldnet.com; Twitter: @dcatchpole.