The World Trade Organization (WTO) has ruled that the European Union has failed to fulfil requests to cease subsidies for Airbus, a move that is believed to have negatively impacted the sales of Boeing’s wide-body jets.
The ruling marks the final step a long-standing dispute that dates back to 2004 and which began over $22bn in subsidised European financing for Airbus. The aid helped the aircraft manufacturer launch its A350 and A350 aircraft.
In addition to the recent decision, the WTO also overturned a previous ruling that concluded subsidies were negatively impacting the sales of Boeing’s single-aisle 737.
WTO’s decision enables the US to hit back against Europe with sanctions that could be enacted as early as 2019. While the amount will need to be determined by WTO in the near future, the sanctions could be applied across a range of goods.
Commenting on the announcement, US Trade Representative Robert Lighthizer shared that the decision: "confirms once and for all that the EU has long ignored WTO rules, and even worse, EU aircraft subsidies have cost American aerospace companies tens of billions of dollars in lost revenue."
Moving forward, WTO will soon need to make a final ruling on whether Boeing itself received subsidies from the state of Washington, the US Department of Defense and NASA. The complaint against Boeing was previously filed by the European Union.