Boeing-Airbus Subsidy Dispute: Recent Developments
Abstract
On October 18, 2019, the United States imposed additional tariffs on $7.5 billion worth of U.S. imports from the European Union and the United Kingdom (UK) (hereinafter collectively referred to as the EU). The action, authorized by World Trade Organization (WTO) dispute settlement procedures, followed an investigation by the Office of the United States Trade Representative (USTR), under Section 301 (Title III of the Trade Act of 1974, 19 U.S.C. 2411- 2420). The USTR determined that the EU had denied U.S. rights under WTO agreements. Specifically, the USTR concluded that the EU and certain current member states and the UK had not complied with a WTO Dispute Settlement Body (DSB) ruling recommending the withdrawal of WTO-inconsistent subsidies on the manufacture of large civil aircraft. In 2011, the dispute settlement (DS) panel confirmed that these subsidies breached the EUs WTO obligations under the 1994 General Agreement on Tariffs and Trade (GATT) and the Agreement on Subsidies and Countervailing Measures (SCM Agreement). The authorization to take countermeasures against the EUthe largest amount in the WTOs historycame after nearly 15 years of litigation at the WTO. The litigation involves the worlds two largest aerospace manufacturers, U.S.-based Boeing and EU-based Airbus, which have competed for years for dominance in the commercial airline supply market. The United States successfully argued that Airbus had received billions of dollars in illegal subsidies, which resulted in a loss to Boeing of significant market share throughout the world. The U.S. action to impose tariffs, consistent with the WTO arbitrators finding on the appropriate level of countermeasures, aims to pressure the EU into either ending the subsidies or negotiating an agreement with the United States.
Document Details
- Document Type
- Technical Report
- Publication Date
- Feb 16, 2021
- Accession Number
- AD1170098
Entities
People
- Andres B. Schwarzenberg
Organizations
- Library of Congress