World Trade Organization: Boeing got $5.3 billion in illegal subsidies

GENEVA -- The World Trade Organization ruled Monday that U.S. aircraft maker Boeing Co. received $5.3 billion in illegal government subsidies over 17 years, far less than what arch-rival Airbus received according to an earlier finding.

The two companies are locked in a long-running dispute over a market believed to be worth more than $3 trillion over the next decade. Each has complained to the WTO that the other is receiving state aid.

Last May, a WTO panel ruled on a U.S. complaint that European governments provided to Airbus, based in France, with $18 billion in subsidies, though not all were found to be illegal under international rules. The European Union had hit back with allegations that Boeing got $19.1 billion in similar subsidies between 1989 and 2006.

While the WTO appeals panel did say on Monday that Boeing received illegal aid, the sums were far smaller than the EU alleged. As usual, both sides claimed a measure of victory.

"Comparing the core claims made by both sides, the net outcome is clear: Boeing's cash grants are fundamentally illegal, while the system of loans to Airbus by European governments is legal and may continue," aid Rainer Ohler, Airbus' spokesman.

Boeing said in a statement the WTO ruling "slashed earlier findings of harm to Airbus from U.S. subsidies. The decision confirms that in terms of amount, effect and nature, U.S. government support to Boeing is minimal in comparison to the massive European subsidies provided Airbus."

Now that the ruling is in, Boeing and Airbus are each required to prove they are complying with WTO rules.

Boeing emphasized that the U.S. government has already removed some $2 billion in prohibited subsidies, leaving about $3 billion still to be addressed.

The European Commission, whose complaint to the WTO was the subject of the ruling, said it welcomed the confirmation that Boeing also received billions of dollars in illegal subsidies.

EU Trade Commissioner Karel De Gucht said Airbus has lost $45 billion in sales due to illegal Boeing subsidies, and that Boeing would not have been able to launch its 787 "Dreamliner" in Washington state without government support. He added the ruling confirms that Boeing was due to get $3 billion to $4 billion in illegal aid due to tax measures from Washington, where it was formerly based.

His counterpart, U.S. Trade Representative Ron Kirk said U.S. subsidies to Boeing have cost Airbus 118 lost aircraft sales, while EU subsidies for Airbus have cost Boeing 342 lost aircraft sales.

Boeing was granted an estimated $450 million in government incentives in South Carolina for bringing a 787 assembly plant and thousand of jobs to North Charleston, but that was after the 17-year period in dispute. A spokeswoman for the company's local campus did not respond to a request for comment.