WTO rules European Union failed to stop subsidies on some Airbus aircraft

Watch video 01:05  Airbus to cut 3700 jobs in Europe

Watch video 01:05 Airbus to cut 3700 jobs in Europe

In its ruling on Tuesday, the World Trade Organization (WTO) said the European Union had failed to remove support in the form of preferential government loans for Airbus's A380 superjumbo and A350 twin-aisle jet programs, causing losses for Boeing and USA aerospace workers.

The EU appealed the compliance panel's findings to the WTO's appellate body, which reversed course and found the EU member states have largely complied with the 2011 order. But its decision on the A320 and A330 models is seen narrowing the scope of punitive tariffs in one of the world's longest and costliest trade disputes.

Later this year, a separate WTO compliance panel is expected to deliver its decision as to whether the USA complied with the terms of a 2012 ruling against illegal US tax subsidies that gave Boeing an unfair advantage.

The tariffs could be scheduled as early as 2019 and would likely be the largest-ever WTO authorization of retaliatory tariffs, Boeing said.

The disputed funding to Airbus had cost US aerospace manufacturers "tens of billions of dollars in lost sales", US Trade Representative Robert Lighthizer said.

The EU highlighted earlier wins in a parallel case against US subsidies for Boeing, and Airbus said this could in turn spark EU sanctions against the United States once the timetable for that case reaches the same point later this year.

Boeing says Airbus received illegal aid worth $22 billion, including $18 billion in loans from governments. But the European Union said it planned to take "swift action" to align with the WTO's recommendations.

The Geneva watchdog, however, had dismissed US claims that the loans for the most popular models of Airbus, the A320 and A330, were costing aignisignif sales to Boeing.

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Separately, the WTO is also to rule on the EU's claim that Washington is providing illegal financial support to Boeing.

"The commercial success of products and services should be driven by their merits and not by market-distorting actions", Muilenburg said.

A ruling in favor of the European aerospace giant would, in turn, allow Brussels to impose its own punitive tariffs on United States goods under WTO rule. NJ gov signs bill to skirt GOP tax law provision MORE (R-Texas) said in a statement. The US government filed a similar claim that year over European subsidies to Airbus.

Airbus says Boeing's willingness to deliver the last rites to the A380 contradicts Boeing's claim that it has been damaged by the same aircraft.

"Today's report is really only half the story", Airbus Chief Executive Tom Enders said. The second ruling - dealing with Boeing's case - is expected later this year.

Boeing shares were down 0.7% at 342.22 on the stock market today.

"The WTO appellate body has definitively rejected the USA challenge on the bulk of European Union support to Airbus, and agreed that the European Union has largely complied with its original findings", European Union trade commission Cecilia Malmstrom said in a statement.

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