As long-time readers of this column know, we have utter disdain for the World Trade Organization and its review of international competitive practices, such as the cases of Airbus and Boeing subsidies.
Here is another example of why we have disdain. As noted in this example, the WTO found China to be in violation of WTO rules on raw materials export rules but China did not remove the restrictions.
We’ve previously noted that the WTO found Brazil and Canada to be in violation of export support for Embraer and Bombardier airplanes–and nothing happened.
We’ve previously noted that the WTO has no power to enforce its own decisions and that the trade rules allow the winning country to impose tariffs on industries not involved in the original dispute. Thus, with respect to the Airbus and Boeing cases, the US could impose tariffs on French wine and the European Union could impose tariffs on Washington State wine or apples–or any other industries.
We find this completely ridiculous.
While the US has asked the WTO authority to impose tariffs with respect to the Airbus case, we would be shocked if it followed through (assuming, of course, the WTO authorized action) and tax Airbus imports into the US. The EU would retaliate by placing tariffs on Boeing. Nobody would win.