777X tax breaks could end up in a WTO court

  • Tue May 20th, 2014 3:51pm

By Dan Catchpole

European Union officials are considering challenging tax breaks passed by Washington last November to encourage the Boeing Co. to assemble the new 777X jetliner here, Reuters reports.

The challenge would be the latest in a decade-old trade dispute between the EU and U.S. over aid for the aerospace industry. Each side accuses the other of illegally subsidizing its respective commercial airplane maker — in Europe’s case, Toulouse, France-based Airbus. The charges could, potentially, result in sanctions from the World Trade Organization.

The U.S. says European governments illegally lent Airbus money to cover some development costs related to the A350.

And EU officials say that Washington’s tax breaks effectively subsidize Boeing’s development costs for the 777X, Reuters reports.

In 2012, the WTO ruled against both Boeing and Airbus for getting illegal state support. The ruling against Boeing involved Washington’s tax breaks for the 787.

Olympia essentially extended the breaks last November. Even then, some were cautioning that doing so could simply invite another WTO ruling against Boeing.

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