Boeing WTO report due today

Update, 6:45pm PDT: Dominic Gates of The Seattle Times updated his 12:45pm snippet eight minutes ago with far more detail, and as of this moment represents the most detailed news report we’ve seen.

As before, both sides are in major spin control, and as before, we will continue to withhold our judgment until the Final Report is issued months from now. But we will note that in the Airbus case when the Interim Report was issued, it turned out the USTR/Boeing spin was (in our judgment) more on target overall than was the EU/Airbus spin.

Update, 4:30pm PDT: Boeing issued a follow-up statement, reproduced after the jump following their advance statement.

Update, 3:00pm PDT: As we did when the US complaint against Airbus came out, we are largely withholding our commentary because we don’t have access to the Interim Report and neither do the Airbus and Boeing spin machines, nor the politicians.

We urge caution in drawing conclusions. The various updates below show the wide variations of what is contained in the reports and we are skeptical of what any vested interest has to say.

We will withhold any of our definitive opinions for what will amount to months, when the Final Report comes out next year.

Update, 10:15 AM PDT: The first actual detail of the WTO Interim Report has leaked, with the BBC providing this report. Boeing got $20bn in illegal aid, says BBC.

BBC reports that $4bn in Washington State tax breaks are part of these.

10:30 AM PDT: As with the Airbus case, both sides are claiming a win.

Update, 12:45 PM: The Seattle Times reports Reuters (and, apparently, the BBC) had the amounts of the illegal subsidies provided Boeing as vastly overstated, and closer to $3bn instead of the $20bn initially cited by Reuters and BBC. If this set of leaks is accurate, this would be a clear victory for the US and not Europe, giving the US essentially two major victories. This could also be a big relief for the State of Washington. Although Gates’ story doesn’t detail precisely what was found illegal, the amounts cited cast doubt on just how much–if any–of the State tax breaks were illegal.

Update, 2:45 PM: The Financial Times of London has a story (free registration required) that paints a very different picture than The Seattle Times and US Boeing partisans. The Financial Times puts specific numbers on the findings, including a reported $5.7bn of illegal subsidies on the Boeing 787 alone. This is more than The Seattle Times is quoting for the entire Interim Report, based on the information it received.

The specificity of the numbers in The Financial Times is important vs. the generalities of some of the other report and statements, including those of the USTR.

Original Post:

The long-awaited and thrice-delayed WTO Interim Report on the alleged illegal subsidies provided Boeing is due to be issued to the EU and US governments today.

The Interim Report is confidential, but leaks are expects, just as they were when the WTO issued the Airbus report. It will be months before the final, public report is issued.

Boeing has already issued a statement in advance of the report (see after the jump). We’ll follow this throughout the day.

For Washington State, the $3.2bn in tax breaks (over 20 years) provided Boeing for the 787 are expected to be a major part of the case.

Here are a couple of selected stories in advance of today’s events:

KIRO-TV (Seattle): Boeing rejects negotiations.

Wall Street Journal: Boeing likely to lose WTO ruling.

AFP (France): Titantic battle goes to the wire.

Reuters: EU Win unlikely to dampen US push over Airbus.

CHICAGO, Sept. 15 /PRNewswire/ — Boeing today released the following statement regarding the impending interim decision by a World Trade Organization (WTO) panel in DS 353, the formal complaint the European Union brought in 2006 against alleged U.S. government subsidies to Boeing:

“We expect the WTO later today to issue a preliminary ruling on charges the EU has made against various U.S. practices at the state, local and federal levels. This ruling follows an earlier final WTO ruling by a separate panel in June that unequivocally condemned European assistance to Airbus – notably the product-development subsidies known as launch aid – as illegal and harmful to U.S. aerospace interests.

“We look forward to learning how the WTO has ruled in today’s preliminary decision on U.S. practices, none of which have the market-distorting impact of launch aid nor even approach the sheer scale of European subsidy practices. In June, the WTO held in a case against the EU that Airbus had received illegal subsidies totaling more than $20 billion in principle. Launch aid, which represented the lion’s share of the involved illegal aid (roughly $15 billion), is unique to Airbus, unparalleled within U.S. industry, and – as the WTO has confirmed – harmful to U.S. aerospace interests and the American worker.

“To date, Airbus and its government sponsors have defiantly resisted abandoning launch aid. Media reports indicate that plans remain in place to provide billions of Euros of launch aid for the A350, a product that will compete with the Boeing 777 and 787. Unless that money is provided on full commercial terms, that would be an incomprehensible step in light of the recent ruling against launch aid and the outstanding obligation under WTO rules that Airbus repay the $4 billion in illegal launch aid it received for the A380, or restructure the A380’s financing to proven commercial terms.

“We have full confidence in WTO processes and its dispute-resolution procedures. The U.S. government’s actions in remedying European concerns with FSC/ETI last decade demonstrate its approach to obligations under WTO findings. Likewise, we fully expect Airbus/EADS and the EU to act in the same way, making good on their end of the WTO bargain.”

Update, 11:15 am PDT:

Today Guy Hicks, spokesperson for EADS North America, issued the following statement regarding the WTO report on Boeing subsidies:

“It has been widely reported that the WTO has found Boeing to be the beneficiary of anti-competitive and illegal subsidies.  The report clearly validates the Department of Defense’s position, namely that ongoing commercial trade disputes between allies are irrelevant to defense acquisitions—including the KC-X tanker competition—and should not be used to circumvent the warfighter’s right to choose the system that best meets their requirements.  This definitive finding by the WTO only reinforces the Department’s position.”

Boeing issued the following statement late Wednesday:

CHICAGO, Sept. 15 /PRNewswire/ — Boeing (NYSE: BA) today released the following statement, responding to public reports indicating that the WTO panel examining European Union allegations of U.S. government assistance to Boeing has issued a confidential interim ruling rejecting the vast majority of Europe’s claims:

“If today’s reports are accurate that some $3 billion of the EU’s claims were upheld by the WTO, excluding the claims that relate to past programs long ago remedied by Congress, then the ruling amounts to a massive rejection of the EU case and confirms that European launch aid to Airbus stands as the single largest and most flagrant illegal subsidy in the aerospace industry.

“Nothing in today’s public reports on the European case against the U.S. even begins to compare to the $20 billion in illegal subsidies that the WTO found last June that Airbus/EADS has received (comprised of $15 billion in launch aid, $2.2 billion in equity infusions, $1.7 billion in infrastructure, and roughly $1.5 billion in targeted research support).

“Nor are there seemingly any violations requiring remedy approaching the scale of remedy required of Airbus/EADS as a result of the WTO’s June ruling that European governments must withdraw and remedy the $4 billion in still outstanding illegal launch aid subsidies that Airbus/EADS received for the development of its A380.  Billions must be repaid or restructured on proven commercial terms. And, equally, they must remedy the adverse effects of the other $16 billion in illegal subsidies, too.

“Neither do the public reports suggest that Boeing’s traditional market based approach to financing new aircraft development will need to change; a distinct contrast to the requirement that Airbus/EADS abandon its plans for financing development of new models such as the A350 through launch aid subsidies.

“Given the shape of today’s opinion, as it has been reported, the WTO findings against the US are likely to require few changes in U.S. policies and practices.  One of the two principal matters that the WTO is reported to have cited as inconsistent with its rules was long ago remedied by the Congress: general US export tax policy embodied in FSC/ETI.  That was litigated at the WTO and remedied last decade.  As to the second principal matter – NASA research – we are heartened to read that, contrary to statements earlier today from European sources, three-quarters of the subsidies at issue were found to be wholly compliant with WTO rules.

“Today’s ruling underscores our confidence in the WTO processes and dispute-resolution procedures.  We applaud the body for its work and continue to look to Airbus/EADS and the EU to recognize that in today’s global market, it is essential that everyone play by the rules and abide by the WTO requirements.  Playing by the rules, for Airbus/EADS, means withdrawing their still-outstanding A380 prohibited launch aid subsidy and financing the A350 on commercial terms.”

30 Comments on “Boeing WTO report due today

  1. a bit about subsidies ..

    Countervailing Duties ­ What Are They?

    In today’s global marketplace, the lack of a level playing field can make it difficult for American businesses to compete. Unfair foreign pricing and government subsidies distort the free flow of goods and adversely affect American business. Import Administration, within the International Trade Administration of the Department of Commerce, enforces laws and international agreements to protect U.S. businesses from unfair competition within the U.S. resulting from unfair pricing by foreign companies and trade distorting subsidies to foreign companies by their governments.
    This article provides a brief overview of how Import Administration provides a way for firms to seek relief from unfairly traded imports by filing a petition seeking the imposition of countervailing duties on imports of the unfairly traded merchandise. Countervailing duties offset the effect of unfair subsidies. Countervailing duty trade remedies have been successfully pursued by a variety of domestic industries, including producers of steel, industrial equipment, computer chips, agricultural products, textiles, chemicals, and consumer products.

    What is a Countervailable Subsidy?
    Foreign governments subsidize industries when they provide financial assistance to benefit the production, manufacture or exportation of goods. Subsidies can take many forms, such as direct cash payments, credits against taxes, and loans at terms that do not reflect market conditions. The amount of subsidies the foreign producer receives from the government is the basis for the rate by which the subsidy is offset, or “countervailed,” through higher import duties. While governments can take many actions which could be said to confer benefits on their producers, not all of these actions are viewed as countervailable subsidies. Generally, the benefit must be limited to a specific group of firms or industries or to a firm’s export activities in order to be a countervailable subsidy. The U.S. statute and regulations establish standards for determining when an unfair subsidy has been conferred.

    How is Subsidization Remedied?
    If a U.S. industry believes that it is being injured by unfair competition through subsidization of a foreign product, it may request the imposition of countervailing duties by filing a petition with both Import Administration and the United States International Trade Commission (ITC). While Import Administration determines whether and to what extent unfair subsidization is occurring, the ITC determines whether the domestic industry is suffering material injury as a result of the imports of the subsidized products. The ITC considers all relevant economic factors, including the domestic industry’s output, sales, market share, employment, and profits. Both the ITC and Commerce must make affirmative preliminary determinations for an investigation to go forward.

    How Long Does it Take for Countervailing Duty Orders to be Issued?

    The investigation begun by a petition proceeds as follows. Import Administration will review the petition and determine within 20 days of the date of filing whether the petition meets the statutory requirements for initiating an investigation. If the petition is accepted, within 45 days of the date the petition was filed the ITC will make a preliminary determination of whether there is a reasonable indication that the domestic industry is injured or threatened with injury by reason of unfairly traded imports. If the ITC believes there is no indication of injury, the investigation is terminated. If the ITC’s preliminary determination is affirmative, Import Administration will make its preliminary determination of whether unfair subsidization is occurring by analyzing sales information provided by foreign producers and exporters in response to detailed questionnaires that Import Administration sends to them.

    If both the ITC and IA make affirmative preliminary determinations (within 190 days of an initiation of the antidumping investigation, or 130 days for a countervailing duty investigation) importers are required to post a bond or cash deposit with the U.S. Customs Service to cover an estimated amount of duties which will be collected if a countervailing duty order is issued upon the completion of the investigation.
    After the preliminary determination, the investigation proceeds with on-site verification of the data submitted by the foreign party doing the subsidizing. A final determination is announced within 75 days of the preliminary ruling. If the finding is negative the investigation is terminated. If it is affirmative, the investigation continues. The ITC typically makes its final determination on injury within 45 days of Import Administration’s final ruling. Typically, the final phases of the investigations by Import Administration and the International Trade Commission are completed within 12 to 18 months of initiation.

    What Relief is the End Result of a Countervailing Duty Investigation?
    If both Import Administration and the ITC make affirmative findings of injury, Import Administration instructs the U.S. Customs Service to assess duties against imports of that product into the United States. The duties are assessed as a percentage of the value of the imports and are equivalent to the subsidy margins, described above. For example, if Commerce finds a subsidy margin of 25%, the U.S. Customs Service will collect a 25% duty on the product at the time of importation into the United States in order to offset the amount of subsidization.

    How Are Subsidy Rates Calculated?
    Subsidy margins are calculated using information collected from the foreign producers and exporters of the subject merchandise. Subsidy rates are calculated by determining the value of the benefit provided by subsidies for the manufacture or export of the subject merchandise. Import Administration calculates the value of the benefits on a company-specific basis using the information obtained from the companies and the government in response to Import Administration’s questionnaires and from other sources. Subsidy rates may also be revised in an annual review process.

    What are the Requirements for Filing a Countervailing Duty Petition?
    Petitions may be filed by a domestic interested party, including a manufacturer or a union within the domestic industry producing the product which competes with the imports to be investigated. To ensure there is sufficient support by domestic industry for the investigation, the law requires that the petitioners must represent at least 25% of the domestic production of the product that competes with the imports to be investigated. The statute requires the petition to contain certain information, including data about conditions of the U.S. market and the domestic industry, as well as evidence of dumping or unfair subsidization.
    ========
    The Import Administration Can Seek Relief for U.S. Firms from Unfairly Traded Imports
    (First Published in Business America, August 1998)By Andrew Stephens, Office of Policy Import Administration and Lauren Baker Office of Public Affairs, International Trade Administration Additional information can also be found at the Import Administration web site: http://www.ita.doc.gov/import_admin/records/

  2. jikes, the Boeing statement is so full of spin, misinformation and plain bull**** that it borders on the pathethic.

    Boeing also seems now to dictate US policy in favour of their short-term goals. Neither side is clean and legal WTO proceedings will go on for many more years. Negotiations btw EU and USA are the best way forward to decide what should be allowed and what not as to set an international standard. Especially in hindsight with the upcoming competitors from other countries. What China alone throws at their aviation industry makes any subsidies from A or B pale.

    Boeing is against negotiatins; Why? I can only think that in short-term they want to spin and leverage WTO results in the tanker process for politic backing and that any clear regulations of subsidies might hurt them more then Airbus.

    I find it hard to explain otherwise why they’d resist negotiations that should be favourable for them in the long-term.

    • “I find it hard to explain otherwise why they’d resist negotiations that should be favourable for them in the long-term.”

      In the discussion with Aurora elsewhere we determined that “free trade” clamoring
      was for gaining an advantage and not for creating a level playing field.

      While Airbus got government investment ( and had to use this money for profitable
      purposes, here: creating competitive passenger aircraft ) Boeing essentially got government gifts with no assigned purpose beyond further existance.

      Managing that existence has become Boeings forte.

      • All I see in your comment is sour grapes that your euro companies didn’t get the (purported) $60 billion Saudi deal.

  3. Uwe, do you really think the RLI EADS/Airbus got from the various EU governments really “created competitive passenger aircraft”?

    There is no compitition if the RLI allowed the aircraft Airbus sold to be sold at below market prices. How can an airline buy an A-330 for around $100M USD, yet claim its value is closer to $200M USD to their insurance companies?

    • That can’t be from “Reimbursable Launch Investment”.
      Those have been paid back to boot.

      Do they make combined “spell and fact checkers” ? I would buy one in your place.

    • Topboom I’d like you to think long and hard why any subsidy to Airbus would have 0 effect on insurance except for the price at which A sells planes.

      I could spoil it for you but what you tried to imply is so nonsensical it should have been obvious by the time you were typing.

    • About 9 years ago, I was involved in a detailed analysis of Airbus/EADS subsidies. The union was ready to file the week of Sept 11, 2001. We held up for obvious reasons. several months later, as the tanker lease deal came to the fore, BA ( read Rudy de Leon) decided to sandbag the union executive director who in turn improperly derailed the petition. In late August 2001, I put the following up on my website.. and it was there till early this year, when my provider – att- bailed out of this local area , , , I had done most of the numerical analysis involved in filing a CVD petition.

      Airbus Countervailing Duty Position Paper [ AUG 2001 ]

      For the past year, the SPEEA Legislative and Public Affairs Committee (L&PA) has been conducting an intensive investigation into the practices of Airbus Industries; namely, the subsidies being provided by EU governments, and the below fair market prices at which they sell their commercial airplanes. SPEEA is concerned because these practices have had a severe impact on the jobs of commercial aerospace workers and the people we represent.

      The L&PA Committee has concluded filling out a very detailed petition requesting relief under U.S. countervailing duty law. The SPEEA Council authorized this investigation, with the goal being to determine whether such a filing could be reasonably supported by examination of publicly-available information from both Boeing and Airbus. Once this petition is filed, the International Trade Administration (ITA) within the Department of Commerce and United States International Trade Commission (USITC) will be able to consider the initiation of a countervailing duty proceeding. Such a proceeding is administrative in nature, and may result in the imposition of special countervailing duties on specific imports.
      In order to fill out the petition, the Committee gathered data from various sources, including: Boeing Annual Reports; the first European Aeronautic Defence and Space Company (EADS) (formerly France’s Aerospatiale Mantra, Germany’s DASA, Spain’s CASA, and Britain’s BAE Systems) Annual Report for 1999/2000; statistical surveys conducted by the European Aerospace Industry (EAI) for 1997 – 1999; information from both Boeing’s and Airbus’ websites; numerous press accounts; and informal discussions with industry representatives. The Boeing Company has neither helped nor hindered us, nor have we had access to any Boeing proprietary data. As SPEEA represents workers within the industry, and not the industry itself, actual sales prices, contract information, profit margins, discounts, and lease information are closely held by the respective companies and were not available to us; however, these can be requested by the ITA and ITC.
      The L&PA Committee has made the following observations which lead to our belief that Airbus, through a variety of methods, is effectively selling their products below cost. Raw material, engines, avionics, landing gear, and similar parts cost the same for Boeing and Airbus. Assembly techniques, automation, certification, process controls, and computer-aided design techniques are essentially the same, and have no inherent cost differences. Additionally, labor costs are higher for EU countries, with differences from 15% higher in 1995 to about 5% in 1998. Finally, the EADS annual report shows that for the year 2000, Airbus’ share of EADS net consolidated profit was zero.
      We then compared the published selling prices of Boeing and Airbus commercial airplanes from 1998 – 2000, omitting figures for the Boeing 747. For 1999, the average cost of all airplanes sold by Boeing was $59 million per plane, whereas the average cost for Airbus was $46.4 million per plane. We then compared two comparable models of aircraft, the A320 and the 737-800. Figures reflected an average 737-800 costing (conservatively) about 10% more than the A320.
      Therefore, how can Airbus, with equal material and subassembly costs, higher labor costs and arguably lower productivity, and admittedly zero profits, still undercut Boeing prices by at least 10 percent? Our determination is that Airbus is selling most, if not all aircraft models into the U.S. at 10 ­ 25% below cost. Note: this does not include special lease, financial, or maintenance agreements, which even further harm our workers.
      In conclusion, the overall affect of the governmental subsidization of Airbus has caused distortions in international trade that support United States governmental action. Therefore, the SPEEA L&PA Committee is recommending the SPEEA Council and Executive Board take action to file the petition for countervailing duty relief with the United States Department of Commerce and International Trade Commission.

      ++

      I’ve seen nothing that refutes the above comments- position

      • As I recall, you also mentioned the reason Boeing did not want this case launched had something to do with that the information that would come out would be highly embarassing to Boeing.
        Or have I got a bad memory?

  4. From the article:

    “For Washington State, the $3.2bn in tax breaks (over 20 years) provided Boeing for the 787 are expected to be a major part of the case.”

    As if Airbus/EADS didn’t get a lot of tax breaks-not to mention infrastructure improvements courtesy of the various govts. This is in addition to RLI.

    • You are correct and Airbus got tagged for these, which is why Airbus is certain Boeing will get tagged for the WA State tax breaks (and those in Illinois and Kansas).

      • From the Reuters article:

        “It (WTO)also dismissed EU complaints over property tax and other measures in Kansas.”

        So it might not be “in the bag” (regarding state tax breaks) as far as Airbus/EADS wants it to be…that being said, again from the article:

        “The European source said the WTO judges had backed EU complaints over some $17 billion in research contracts from the U.S. aerospace agency NASA and the Pentagon……The WTO judges found these payments broke WTO rules and should be withdrawn, the source said. The figures were not cited in the report but were derived from adding the respective claims.”

        http://uk.reuters.com/article/idUKTRE68E4LP20100915

        This might have some “teeth” in it (to which extent, we don’t know), but like EADS/Airbus RLI, I don’t see how Boeing will be forced to return the money….

        In the end, there probably will be some kind of negotiations between the two but I don’t know which manufacturer it will favor (if at all).

    • Quote: The issue has cost “millions in legal fees and still promises no clear-cut solution,” Mandelson wrote in the London- based Times on Sept. 13. Boeing has used the WTO “as part of a wider plan to discredit Airbus and harm its prospects in the U.S. Legislative threats, retaliatory gestures, verbal attacks by members of Congress on the EU, on individual governments and on Airbus continue to sour the commercial dialogue.”

      http://www.businessweek.com/news/2010-09-15/wto-rules-boeing-got-illegal-u-s-government-aid-france-says.html

      • We’ll probably see after some judicious waiting what factual meaning will exude from each side shouting “Мы вас похороним!” this time around.

    • UPDATE 1-US faults European claims in WTO ruling on Boeing

      http://www.reuters.com/article/idUSN1517983020100915

      Quote 1: “There seems to be a number of significant inaccuracies,” Nefeterius McPherson, a spokeswoman for the U.S. Trade Representative’s office, said in response to published reports based on European sources.

      Quote 2: McPherson said she could not discuss the content of the reports because it was still confidential.

      So key words from USTR are “significant inaccuracies” and “confidential”. 😉

  5. Let round infinity plus one of the traditional urination contest begin. Both sides claim victory. “Mine is bigger( smaller ) than yours ” and so on ad nauseaum !

  6. If that Reuters report is correct and the offending amount is indeed $3 billion USD, Boeing could come into compliance, pass on the appeal, push for EU compliance, and file a new A350 case.

  7. +++ Breaking News +++
    Airbus in talks with China for monster order, 150 aircraft worth over $16 billion

    Airbus SAS is in talks with Chinese authorities and companies for an order for 150 planes worth $16 billion at catalogue prices, French daily La Tribune reported, citing unidentified people.

    The contract would at a minimum include a firm order for 150 planes, comprising 120 A320s, 20 A330s and 10 A350s, according to La Tribune. The firm order could be for more than 200 planes, to which options on more planes might be added, La Tribune said.

    An agreement may be announced in November when Chinese President Hu Jintao visits France, the newspaper said.

    Source:
    http://www.bloomberg.com/news/2010-09-13/airbus-china-discuss-16-billion-150-airplane-order-la-tribune-reports.html

  8. Anyone here think the global aerospace industry is anything but a massive jobs program doesn’t get the picture.

    At least half the sales of aerospace is in defense – purely governmental. Many of the large commercial airplane buyers are heavily entwined with a sponsor government – landing/take-off rights are strictly controlled by governments and international agreements.
    Japan/Italy pay for at least the same share of the development cost of the 787 as RLI does/did for A350/380

  9. From the D. Gates article, “Included in the $5 billion finding is a reiteration by the WTO of a 2000 ruling that a U.S. Foreign Sales Corporation (FSC) tax regime that benefited Boeing is illegal. The U.S. changed that tax law, and Boeing considers this finding already remedied.”

    After some 11 years following the initial report finding the US in violation, Boeing has not yet paid back its $5 billion yet considers the case closed. It took the US Government itself some 7 years to sort things before a mutually acceptable resolution could be found. Yet Boeing and the US Government demand immediate action from Airbus and the EU in their case. Interesting.

    Seems like some people have a strange concept of playing by the same rules.

  10. From Dominic Gates’ article liked above: “The $20 billion is the principal amount of subsidy that Airbus received and the $3 billion, leaving out the older FSC subsidy, is the amount found by this panel in its interim report for Boeing,” [the source close to the U.S. side of the case] said. “That’s an apples-to-apples comparison.”

    As far as I recall the illegal Airbus subsidies mainly came in the form of loans, so the subsidy element would be the difference in repayment terms between a subsidized loan and a commercial one, not the $20 billion principal. All these subsidies are actionable – which means that you have to do something about them. I suspect adjusting repayment terms is easier than paying the full amount back.

    For the reasons Aero Ninja has already pointed out the $3 billion should be at least $8 billion. Hardly “apples to apples”. Surprise!

    leehamnet: “We will continue to withhold our judgment until the Final Report is issued.” Wise man!

  11. You also need to be careful with your terms. The WTO makes a distinction between subsidies that are “prohibited”, “specific” and “actionable”. I believe only the German, Spanish and UK launch aid for the A380 was prohibited on the Airbus side (because it was linked to export performance). The others were specific, and actionable because of adverse effects on US Aerospace, but not actually illegal. You don’t need to remove the subsidy but you do need to deal with the adverse effects, which were pretty vague in the Airbus case.

    The various spin (deliberately probably) muddies the waters about what type of subsidies WTO has found against Boeing: “prohibited”, “specific” and/or “actionable”

    Correcting Aero Ninja and my comments above, it looks like the FSC subsidy is quantified at $2 billion.

    • FF, thanks for the clarification. I am certainly not one for the finer points of trade talk.

      My main concern was to point out that, irrespective of how much Boeing is on the hook for the FSC issue, they don’t appear to have any intention of repaying those funds.

    • Would, in the WTO cases, a deemed “illegal conditions” credit received be accounted
      as the full credit volume or as the monetary advantage received
      under those andvantageous conditions?

  12. Aurora :
    All I see in your comment is sour grapes that your euro companies didn’t get the (purported) $60 billion Saudi deal.

    Limited intellectual reach on your side?

    After Afghanistan and Irak the US in heating up tensions towards a conflict with Iran is launching the next massive “Jobs Programm”.

    This is certainly not the sole reason.

    But it is a major synergetic element.

    • After Afghanistan and Irak the US in heating up tensions towards
      a conflict with Iran is launching the next massive “Jobs Programm”.
      This is certainly not the sole reason.
      But it is a major synergetic element.

      No necessity to be furious. The Saudis are capable of carelessly
      leaving dozens of their US built $150 million fighter jets out in a
      sandstorm over night. No wonder they have such a high demand for
      replenishment, if their equipment is wearing out that fast 😉
      Why shouldn’t US defense industry take advantage of such insouciance?

  13. Just stating the obvious, Uwe; bad case of sour grapes displayed in your posts here and on an earlier thread when referencing this sale. Is there any doubt that if this deal fell through, Merkel and Sarko would be on their way to Saudia Arabia at Mach 3 to sell more eurofighters & eurocopter products?

  14. Aero Ninja :
    As I recall, you also mentioned the reason Boeing did not want this case launched had something to do with that the information that would come out would be highly embarassing to Boeing.
    Or have I got a bad memory?

    Close … There were several issues which were not mentioned until a year or more later. However this quote from the minutes of the meeting in late jan 2002 support the ‘ concerns” of Boeing. Especially the comment about FSC ..

    “at that time – there WAS no connection between tankers and the WTO-GATT- CVD issues.

    “Mr. DeLeon started with his resume, which included the important fact that he had only been with the Boeing Company for the past six months or so. He continued wit the fact that he was here today to discuss three issues: 1) Air Force 767 tanker program; 2) FSC tax, and 3) the plusses and minuses of a trade filing at this point in time. Mr. DeLeon has a team of 12 looking at the Airbus issue which was commissioned by Phil Condit. ” . . . .

    “How does our CVD petition cause a problem – – – questioned, Answer: A trade case opens up a third front to attack Boeing on. Airbus would say Boeing wants a trade case because we can’t compete in the market place. The fact that SPEEA filed the CVD Petition makes no difference, as it would be said that Boeing put us up to it. Rudy focus if we do file the CVD Petition will be on 767 tankers and FSC tax so he hopes he does not have to deal with the petition. ”

    The tanker issue AT THAT TIME was NOT an issue had it been an upfront game by boeing. This is cuz the 92 GATT/WTO then ( as now ) specifically excluded military. Of course WE did not know at that time about the SEARS-DRYUN games . .

Leave a Reply

Your email address will not be published.