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WTO Gives U.S. & Boeing the “Airbus Treatment”

Wrote a little about Boeing winning its case in 2009, you can read that here.

Given the millions spent in lobbying, the political gamesmanship, and God knows what else Boeing and their advocates have been asking for, I’m not all that surprised to see this come down from the World Trade Organization.

Planemaker Boeing received at least $5.3 billion of dollars of banned U.S. subsidies, the World Trade Organization said on Thursday.

The subsidies included banned support in the form of research and development payments from the NASA space agency.

The ruling by a panel of trade judges is the latest round in a six-year battle between the industry’s two giants that has spiralled into the world’s largest and costliest trade dispute.

A separate WTO trade panel condemned European support for Boeing rival Airbus in a parallel case last year.

Both sides immediately claimed the upper hand in the row, which now extends to 2,000 pages of rulings in the most complex and bitter battle ever brought before the Geneva trade court.

Airbus, part of European aerospace group EADS, said it had lost $45 billion in aircraft sales because of the subsidies.

“It’s time for Boeing to stop denying or minimizing the massive illegal subsidies it gets,” said Rainer Ohler, head of public affairs and communications at Toulouse-based Airbus.

Boeing acknowledged receiving $2.7 billion of illegal U.S. funding on top of a dispute that has already been aired, but said this was dwarfed by more than $20 billion of European aid which it said the WTO had earlier identified at Airbus.

“This WTO ruling shatters the convenient myth that European governments must illegally subsidize Airbus to counter U.S. government assistance to Boeing,” said Michael Luttig, executive vice-president and general counsel at Boeing.

Someone once told me during my Heritage days that plane makers have gotten so big, and the airline industry so picky about its fleets that the only way these companies are making any money at all is through government subsidies.

I had hoped that person was just being factious with that statement, but they were probably more correct than I assumed at the time.

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