The World Trade Organization (WTO) has broadly upheld a ruling that Boeing Co took billions of dollars of unfair subsidies,breathing new life into an epic trade spat that has already faulted European aid to Airbus,people familiar with the matter said.
The worlds largest trade dispute,involving mutual claims of aid to the dominant planemakers,reaches a crucial point on Monday when WTO appeal judges are expected to complete a pair of investigations by publishing their verdict on aid to Boeing.
At stake is whether the worlds largest planemakers can continue to benefit from alleged public aid for heavy investment in new aircraft,though analysts say it may be years before the complex legal processes are finally exhausted. Mondays ruling,coupled with a parallel case on Airbus that went largely against Europe,could influence the balance of power and timing of any negotiations to end the seemingly endless spat,but there are no signs of any agreement to talk.
The United States is instead pressing for $7 billion to $10 billion in annual sanctions in its own case on Airbus. Most trade analysts say that in practice such measures would take years to unfold. The two sides accuse each other of soaking up billions of dollars in sham contracts and loans,while potential competitors in China,Canada,Russia and Japan are closely watching the case as they prepare to try to break open the transatlantic duopoly.
A WTO panel ruled last year that Boeing had received at least $5.3 billion in subsidies through research contracts mainly from space agency NASA as well as a series of tax breaks.
The findings followed a six-year probe into European Union claims that Boeing had received over four times that amount.
The EU filed the complaint as a counter-suit to US claims that Airbus had benefited from decades of European government loans,which the WTO trade body also deemed unfair.
People on both sides of the dispute,who asked not to be identified,told Reuters the Geneva trade courts appellate body had upheld the bulk of the findings on the Boeing aid. An advance copy of the ruling has been delivered to both sides but the findings are being held under wraps until Monday.
It wont change much,but there may be some changes around the edges of the decision, a US source said A European source called the ruling a victory for the EU. The Geneva-based WTO declined to comment.