EU can retaliate against Boeing immediately; old WTO win outstanding

Sept. 30, 2019, © Leeham News: An obscure and largely forgotten European win in a previous illegal subsidies case against Boeing and the United States before the World TradeOrganization (WTO) opens the door for immediate retaliation against Boeing if the Trump Administration levies tariffs against Airbus.

LNA yesterday revealed the European Union may retaliate immediately against US tariffs on Airbus or EU goods. The US will be free to do so as early as October.

Boeing at risk of immediate EU retaliation

Under WTO rules, tariffs don’t have to be levied against the offending company. Tariffs may be levied against other industries.

Previous EU cases before the WTO dating to the early 2000s involved an obscure US law, called Foreign Sales Corp., (FSC) financings, were determined by the WTO to be prohibited subsidies. Congressional action eliminated FSC financings and replaced it with a new mechanism. The EU filed a new complaint and the WTO also ruled this to be prohibited subsidy.

The WTO identified $2.2bn as the amount the EU could slap tariffs on, according to news articles or the era. Wikipedia, which isn’t to be taken as gospel, put the amount at more than $5bn.

The EU never levied tariffs are a result of these FSC wins. As reported yesterday, it also has other wins for which no tariffs were levied.

US, Boeing miscalculations

The US and Boeing have refused EU and Airbus suggestions to negotiate a settlement. The current WTO case filed by the EU against the US over Boeing subsidies is at least six months behind the US vs EU case. The US side believes this gives it (and Boeing) the advantage to press its case to eliminate all launch aid to Airbus.

But this position miscalculates the history and the ability to retaliate against Boeing now.

The backlog of orders Airbus and Boeing have in the US and EU may be found here.

 

 

38 Comments on “EU can retaliate against Boeing immediately; old WTO win outstanding

  1. What is wrong with Boeing?There’s nothing to be gained here. Why do they put their own huge subsidies and the interests of their defence division at risk?

  2. Scott, what about sale to non-US lessor and lease back ? Could it be a way for US airlines to avoid US tariffs on Airbus planes ?

  3. I anyway don’t understand these tariffs. It’s not the exporting company that has to pay them, it’s the local client that pays the bill (at least for contracts already signed). So the US government would hurt mostly its own people/airlines.

    Of course, it would prevent/lower new sales, but then again, it strips buyers from choice and possibility to procure the best suitable product.

    Curious times.

    • I believe the reason for all these tariffs, is because the right wing base doesn’t understand that those are taxes on them, leaving the government open to tax the hell out of us.

  4. It hasn’t happened, yet. But if it does? It’s a case of shooting yourself in the foot.

    The US market cannot sustain US manufacturing. The US needs international markets to maintain it’s manufacturing.

    Why is the US trying to p*** off eveybody? I would love an answer?

    • Well I am not so sure as the US Market is the biggest one in the world.

      Gets serious off topic but……

      The fact we do export high value Dozers say is offset by import of cheap bulldozers.

      Or if the cheap extension cords go away, I will buy a slightly more expensive one (or go without)

      Back when I was framing houses, Korean cheap sinker nails ( plain sucked) but we paid the same price as US Steel sinkers that were fantastic (cheap sinkers you have to hit exactly square on the head or it bends – US Steel you could hit offset a bit and fine, and with a hammer its extremely difficult to hit it perfectly square.

      I could pick through the boxes and get US steel, anyone who got a framing package just got Korean or US Steel whatever box was there, but you paid the same for them. So who got what here?

      Nike sells shoes for $150 that cost them $5 to make, so what is the benefit other than to Nike?

      And no the US is not trying to piss everyone off, but our tin horn dictators does not care.

      He actually has some relevant issues that tick off US citizens (Europeans not paying for their own defense – how he goes about addressing them is stupid.

      • Why should Europe pay for US military adventures
        and in general for decivilizeing one nation after the other .. for fun?

        • First I am fully aware of my countries flaws and its history, some of it is truly gruesome and ugly. Its also been a beacon for a whole lot of people for 200 some years.

          As for Europe, well there have been 4 wars over there since 1915

          So maybe the Germans weren’t so bad the first time around, the second was unfathomable in evil.

          Then your friendly Bear to the East who had a nasty issue with the Germans (rightfully so) but equally ugly and lack of conscience (you know, incarnation, unbelievable brutality , look at someone wrong and you are shot.

          So what part about snuffing any of those actors was wrong?

          Or the flip, do you really want to live that way? And do your neighbor endorse that or would they rather you shuckled off to
          Syrian to enjoy the comforts ISIS offers?

          Or do you think if it weren’t for the US and GB France forces that Putin would not be another 800 miles deeper into Europe?

          Or the Chinese who are claiming any territory they sailed past 2000 years ago? And the Silk road winds up where?

          So is the US some pure shinning angle in the night? No, we have all our bad with the good (idea of Democracy perfect or not).

          Do you think the US wants to stay in Poland? Do you think I like having so much of my tax money go to support other places that there is none left for a social system?

          What I can tell you is my father, his brother, two friends and innumerable acquaintances went to dark places for a long time so that the slime of the Swastika did not fly over our the US like it was over a bunch of them and not just combat causality but slave labor and concentration camps that gassed Jews, Gyppsis and the other riff raf per the Nazi’s designation?

          Do you believe you just say stop it and those things don’t happen?

          Europe failed miserably to deal with a piss ant group in Yugoslavia that the American National Guard could have dismantled in a week.

          I wold be curious as to your answer to all that. Hopefully one that deal in facts and not conspiracy theories like Holocaust Denial. theories.

          • How come some pissant groups in Somalia sent the US packing…and much more recently was it Mali..?

          • “Europe failed miserably to deal with a piss ant group in Yugoslavia that the American National Guard could have dismantled in a week.”
            If the poster boys like Bush43 are any indication of NG personnel: definitely not.
            But the US actually brought the pot there nicely to a boil
            via weapons infusion and kindly spread propaganda setting the various groups on edge and against each other.
            The intent was to destroy Yugoslavia as a nation. That seems to have worked nicely.

          • My apologies, I was attempting to interject some logic into this. Once the Tin Hat is donned it stays donned.

            Duke: You seem to forget that I am always willing to discuss my countries failings (though I am also proud of what it is as well) and that I enjoy, despite an ugly current system I was able to quit my job and enjoy life for however long that lasts)

            I can cite the Native American Wars as a dark side though they were started by European invasions of the Americans. My antecedents did not do that.

            We can talk about the ugly take over of the Philippines from the Spanish (well they did a lot of good work around the globe did they not?)

            Slavery is an ugly stain we should never try to erase but accept that it was part of us. You might want to look up Gettysburg (not the costliest battle but a very heavy loss to the nation and a near run thing and a President who expressed our deepest feelings that will stand with the Magna Carta as a document for the ages).

            You might want to read about the stand by Chamberlain at Little Round knob and what men (and women) of this country are willing to give for an ideal (we will never achieve it but it is the one that many have died for)

            Internment of Japanese American Citizens (and Japanese resdidents) in WWII was in my opinion the grossest violation of what we stand for as a modern nation (or try to)

            The Vietnamese handed our butt to us.

            Somalians to a lesser degree did as well (and don’t forget the Lebanese barracks blow up)

            But then the Japanese gave us a swift kick in the cojones and we came back with a vengeance.

            And it was not all glory, dark times of Savo Island come to mind.

            You do seem to enjoy the deaths of Americans who are doing what they have pledged their oaths to do.

            Those who pledge that oath do so in the hope that if they die it means something to the safety of their country.

            My father, uncle and two friends severed in the front lines of
            WWII and I know what they faced.

            A neighbors house caught fire because the neighbor refused to take the necessary measure to keep that from happening. In turn that endangered our house.

            Read about the countries that stopped the Golden Horde at the very borders of Europe. Many did not face that and benefited from that sacrifice they made.

            My Country, Right and Wrong, but it does stand for something other than commercialism and greed that so many feel is what it is all about and sit in the comfort of their borders knowing that they don’t have to risk anything because someone else is out there doing it for them.

            What you miss is that like my job, I always strove for perfection knowing I would seldom achieve it. But I knew what the ideal was and I never stopped trying.

          • “My Country, Right and Wrong, but it does stand for something other than commercialism and greed that so many feel is what it is all about and sit in the comfort of their borders knowing that they don’t have to risk anything because someone else is out there doing it for them.”

            It stands for subverting everything for the god of profits. what the Golden calf represents.
            It is time that comes to a hard stop.

          • Geeeze- how did we get from WTO to world history, holocost, forgot crusades, Nazis, and other off topic crapola ?

            I’m surprised this whole diatribe has not been scrubbed, deleted, and participants put into the penalty Box

            On topic- if it wasn’t for WTO (nee GATT92 ) Airbus would probably not exist.

            What we now have is not really above the ‘ sos your old man, mine is bigger than yours, and mommy, look what he did- between the only two major commercial airplane manufactures in the world.

            About as predictable as the next episode of Archie bunker –

          • @Bubba is correct, and I was on other things.

            Everyone: stay on topic.

            Hamilton

  5. It will be interesting to see if the USA does go ahead with their tariffs knowing the EU has ready to use WTO approved tariffs to use at will.

    Of course, one wonders what use these tariffs have and just how fair/just it is if they can be used against any segment of a country’s economy, rather than the one breaking the rules.

    • Go to Vegas, find a Roulette wheel, throw the ball on it and watch the wheel spin and the ball bounce.

      Only time will tell.

      As there is no policy and the policy maker may well be gone in 6 months, stay tuned.

  6. And the decision is …. “USD 7,496.623 million per annum” (i.e. about 7.5 billion USD per year). See the excerpt below from the updates posted for the DS316 case on the WTO website today (10-2-19).

    “Summary of key findings
    The subsidies at issue in this proceeding were actionable subsidies disciplined under Part III of the SCM Agreement. The Arbitrator determined that the level of countermeasures “commensurate with the degree and nature of the adverse effects determined to exist”, in the December 2011-2013 reference period (which was the same reference period used in the compliance proceedings) within the meaning of Article 7.10 of the SCM Agreement, amounts to USD 7,496.623 million per annum. Therefore, the Arbitrator concluded that the United States may request authorization from the DSB to take countermeasures with respect to the European Union and certain member States, as indicated in document WT/DS316/18, at a level not exceeding, in total, USD 7,496.623 million annually.

    These countermeasures may take the form of (a) suspension of tariff concessions and related obligations under the GATT 1994, and/or (b) suspension of horizontal or sectoral commitments and obligations contained in the United States’ services schedule with regard to all services defined in the Services Sectoral Classification List, except for financial services.”

    https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds316_e.htm

    • The excerpts below are from the Reuters story at the link after the excerpts.

      “A panel of three WTO arbitrators said the United States had suffered harm equivalent to $7.5 billion a year from discounted European government loans for big jets like the Airbus A380, the world’s largest airliner. The decision – confirming a figure reported by Reuters last week – allows Washington to target EU goods also worth $7.5 billion, but bars tariffs on financial services.”

      “Before any tariffs can be imposed, the WTO’s Dispute Settlement Body must formally adopt the arbiters’ report in a process expected to take between 10 days and 4 weeks.

      Its next scheduled meeting is on Oct. 28, but Washington could request a special meeting 10 days after the arbiters’ report is published, suggesting an earliest possible final nod on Monday Oct. 14, the first working day after the deadline.”

      https://www.reuters.com/article/us-wto-aircraft/u-s-wins-backing-for-tariffs-on-europe-in-airbus-clash-idUSKBN1WH0SI

    • The excerpt below is from the 10-2-19 Reuters article at the link after the excerpt.

      “Europe is facing tariffs today because Airbus has refused for years to comply with WTO rulings,” Boeing said in a statement.

      “Yet even today, Airbus could still completely avoid these tariffs by coming into full compliance with its obligations. We hope it will finally do that.”

      https://www.reuters.com/article/wto-aircraft-boeing/boeing-says-airbus-could-still-avoid-tariffs-by-obeying-wto-idUSL5N26N591

    • The quotes below are from the 10-2-19 Washington Post article at the link after the quotes.

      “The World Trade Organization on Wednesday authorized President Trump to impose tariffs on about $7.5 billion worth of European goods, capping a 15-year trans-Atlantic dispute over illegal subsidies to aircraft maker Airbus. The decision opened the door to a broader trade war with the European Union.

      The administration plans to impose tariffs of 10 percent on European aircraft and 25 percent on a variety of agricultural and industrial products, once it receives the final WTO approval later this month, a senior official with the office of the U.S. Trade Representative told reporters.

      USTR, which identified French wine and Italian cheeses as potential tariff targets earlier this year, plans to make public its final product list as soon as this evening, said the official, who insisted on remaining anonymous to brief the press. The tariffs are expected to take effect October 18.”

      “USTR opted to exempt aircraft parts from the new tariffs, a move that could limit the damage to the European company’s U.S. operations.”

      https://www.washingtonpost.com/business/economy/the-united-states-can-impose-tariffs-on-75-billion-in-goods-because-european-union-gave-illegal-subsidies-to-airbus-wto-rules/2019/10/02/021edc06-e51d-11e9-b403-f738899982d2_story.html

  7. Juncker is probably under quite a bit of pressure at this point, between Brexit and the prospect of an American trade war.

    On the broader trade dispute the issue seems to be an EU position of unwillingness to negotiate on agricultural market access. Perhaps a bit ironic on the day Brussels is ground to a virtual halt over new duties on farmers. Their ag industries could be wholly uncompetitive globally if taxed based on ‘carbon’ footprint etc.

    • EU farmers are already see themselfes under the bus for meat imports arranged from the MERCOSUR nations. Additionally US allotment for imports has been increased afair.
      But: if local produce is CO2 taxed imports will get the same attention.

      Strong moves are made to nix sanctions set up against Russia.
      This has solely been to the detriment of EU farmers.

      US pressure will dissipate and while doing that will reduce any willingmes going with US measures. Even corrupt, bought EU politicians and Eurocrats have lost traction to push US agenda.
      Same for intense pro US interest “reporting” in the media.
      What East block people knew all along is now aquired knowledge in the EU too: there is Truth and there is Pravda.

    • Hello Zeng,

      Thank you for posting the link to the US Trade Representative’s not quite yet final list of Tariffs.*

      Regarding: “Really hope this gets negotiated, otherwise thousands of US jobs will be lost.”

      Note that while “airplanes and other aircraft (other than military airplanes or other military aircraft), of an unladen weight exceeding 30,000 kg” are included in the list, aircraft PARTS are NOT included in the list. Thus, Airbus is apparently welcome to import aircraft parts tariff free into the US, and assemble them in US factories to create as many finished aircraft as they would like, that they may then sell tariff free to US Customers.

      *”This list of products subject to additional duties is provided for information purposes only. The definitive product coverage will be determined by amendments to the HTSUS that USTR will publish in an upcoming Federal Register notice. The effective date of the additional duties is October 18, 2019.

    • jobs lost?
      color me unimpressed.
      blowback, … this started with China produce already. lots of small businesses in the US depend on reasonably priced parts from China.
      ( local produce neither match price nor quality.)

      Here in Germany we’ll get dumped some surplus whisky cheap. or some pure malt? mhhm 🙂

  8. Below is an excerpt from the conclusion of Addendum 1 of today’s (10-2-19) WTO Arbitration Panel Report in the US vs. EU DS316 case, which may be found on the WTO website at the link after the excerpt. This excerpt, written by the WTO arbitration board, does not match the sentiment that pure and innocent Airbus is a victim of the evil US/Boeing conspiracy, that is prevalent in the comments on this blog. For those falling hook line and sinker for the EU/Airbus “we want to negotiate but the evil US refuses” propaganda campaign, read carefully and think carefully the following, written by the WTO, from the first paragraph in the excerpt below.

    ” But after 14 years of litigation, and ten years since the original panel findings against the EU, without a single, meaningful step by the EU to reform LA/MSF – and, in fact, a period in which the EU reinforced its WTO-inconsistent behavior by providing the latest and largest tranche of subsidized LA/MSF to date (and with no guarantee that it will not once again do the same) – this option is all that remains.”

    “CONCLUSION

    43. Effective countermeasures are the last remaining hope to force the EU to reckon with the pernicious effects its LA/MSF subsidies cause, and hopefully achieve a solution to this longstanding failure to comply with its WTO obligations. For the United States, as with the DSU, these countermeasures are not the preferred option. But after 14 years of litigation, and ten years since the original panel findings against the EU, without a single, meaningful step by the EU to reform LA/MSF – and, in fact, a period in which the EU reinforced its WTO-inconsistent behavior by providing the latest and largest tranche of subsidized LA/MSF to date (and with no guarantee that it will not once again do the same) – this option is all that remains.

    44. The EU’s efforts to greatly expand the limited scope of this proceeding to evade the consequences of its WTO-inconsistent behavior for longer still, represent an attack on the very utility of dispute settlement at the WTO. Despite that the EU has provided these WTO-inconsistent LA/MSF subsidies to every single Airbus LCA program, and that the EU has taken zero meaningful steps to address these subsidies or the effects they cause, the EU seeks to avoid countermeasures commensurate with the degree and nature of the adverse effects determined by the WTO to exist. The EU tries to guarantee itself the right to continue its course of unabated, WTO-inconsistent subsidies with limited and ineffectual, if any, consequences. The EU therefore, in effect, seeks to have the Arbitrator declare that the WTO rules and dispute settlement system simply cannot deal effectively with the EU’s massive subsidization of Airbus, or with subsidies of this nature in general.

    45. But the EU is wrong. The DSB adopted reports twice, making clear that the EU’s LA/MSF subsidies breach the EU’s WTO obligations by causing massive adverse effects to the United States. The SCM Agreement and the DSU explicitly provide for the United States now to obtain authorization to impose countermeasures commensurate with the degree and nature of those adverse effects. To deny the United States that right would be to cement in perpetuity the imbalance imposed by the EU’s subsidies. It is long past the appropriate time for the EU to argue about whether, or the extent to which, its subsidies cause adverse effects.”

    https://docs.wto.org/dol2fe/Pages/FE_Search/FE_S_S009-DP.aspx?language=E&CatalogueIdList=257360,257361,250346,249762,249543,248455,247318,246883,246665,245742&CurrentCatalogueIdIndex=1&FullTextHash=&HasEnglishRecord=True&HasFrenchRecord=True&HasSpanishRecord=True

    • @AP_Robert

      Dishonesty is the alternative to intellectual honesty. Common forms of intellectual dishonesty include incorrectly reporting results, or selectively omitting data in an attempt to prove a hypothesis or to support a position.

      Now, ANNEX B contains the ARGUMENTS OF THE PARTIES. Thus, Annex B does not contain or represent any decision of the Arbitrator.

      The “conclusion” and points 43, 44 and 44 belong to a multi-point paragraph of ANNEX B-1; INTEGRATED EXECUTIVE SUMMARY OF THE ARGUMENTS OF THE UNITED STATES; and where Annex B-2 is the Executive summary of the arguments of the European Union.

      Hence, your claim that the excerpt was written by the WTO arbitration board, is clearly false. It was written by the USTR.

      What is clear, though, is that you’ve been exorbitantly busy “reporting” on the matter, while posting multiple links to the WTO etc.

      Hence, it appears as if your on-line behaviour, in the comment section of this blog, looks rather more like a case study of obfuscation usage on how to leave a trail of confusion, instead of serious, objective reporting.

      Interestingly, it would appear as if you’ve been counting on the Administration hitting Airbus with punitive tariffs on single aisle aircraft assembled in Mobile, as demonstrated in this thread — i.e. backing up your arguments with multiple links to the WTO…..

      https://leehamnews.com/2019/09/14/wto-clears-us-for-10bn-in-tariffs-in-airbus-subsidy-case/#comment-283156

      Now, as for this nonsense:

      This excerpt, written by the WTO arbitration board***, does not match the sentiment that pure and innocent Airbus is a victim of the evil US/Boeing conspiracy, that is prevalent in the comments on this blog. For those falling hook line and sinker for the EU/Airbus “we want to negotiate but the evil US refuses” propaganda campaign, read carefully and think carefully the following, written by the WTO, from the first paragraph in the excerpt below.

      The fact of the matter is that Boeing and the USTR started all this by filing a World Trade Organization (WTO) dispute settlement case against the European Union (EU) in October, 2004. The counter-complaint by the EU was filed (request for consultations) in June, 2005.

      It appears to me that a common sentiment among commenters on this blog — i.e. sentiment held among those who never jumped on the Boeing/USTR bandwagon — is that the aerospace industry world-wide is a heavily subsidised business and that

      1), Airbus and Boeing are about equally guilty in receiving subsidies, but that

      2), Boeing and the USTR do not appear to have admitted that Boeing, in fact, is one of the most heavily subsidised corporations in the US.

      Hence, it would appear that the hypocrisy from the US side on this matter is nothing but staggering.

      The sense of entitlement from the US side appears to be equally staggering:

      By the time the A330 entered service in 1994, Airbus had introduced three new aircraft in six years. Although the A300 and A310 were selling well, there was no way that the partners could cover the development costs without government help, and that brought a simmering transatlantic trade dispute to a boil. Boeing had cried foul in 1978 after the Eastern sale, but Lathiere wasn’t interested in a debate. “I think the big bad wolf is screaming,” he said at the Farnborough air show that year, “because Little Red Riding Hood has bitten him in the ass.”

      Between 1978 and 1985, the A300 and A310 sold as well as the 757 and 767, and Boeing became more concerned. In a 1985 presentation to visiting aviation reporters in Seattle, Boeing declared that Airbus would lose $18 billion by the early 1990s. “We’ve been very patient for the last 10 years,” said, on that same occasion, Boeing vice president Thomas Bacher of the prolonged trade dispute, “but now we’re getting more impatient. In fact, we’re getting very damn mad.” Publicly, European leaders pointed out that Boeing had received government support in the past—the company’s jetliner business had been founded on the back of Pentagon orders for bombers and tankers—and the company was still allowed to charge research and development work to the Pentagon.

      But there wasn’t much substance to the defense, because Airbus finances were a riddle wrapped in a mystery inside an enigma. When Airbus was launched, the chosen legal vehicle for the new consortium was a French creation called a groupement d’intérêt économique, or GIE. (Before Airbus, the typical GIE was a wine-producing cooperative.) Owned and supported by the partners, the GIE bought airplane parts from the partners and collected money from the customers.

      French law regarded the GIE as a private arrangement between businesses, and did not require it to publish accounts. Profits and losses from building subassemblies, along with the costs of supporting the Airbus headquarters, were buried within the accounts of the partner companies.

      From the U.S. point of view, just because the subsidies were hard to find didn’t mean they weren’t there. Beteille and his colleagues were right: There was no way to make money with less than 30 percent of the market. Without subsidies, Airbus would never have reached that point and would eventually have disappeared—which would have been all right by Boeing’s Bacher. “Europe builds beautiful trains and systems like that,” he said in 1985. “I challenge the concept that everyone has to build everything.” If Airbus could not show a profit it should do the right thing and disappear.

      By the early 1990s, with the 30 percent goal in sight, the United States and Europe managed to settle the subsidy question, agreeing that governments could supply no more than a third of the development cost of any new airplane. One postscript to this story is that the British government loaned money to BAe to develop the A320 with no fixed interest rate or repayment schedule, in exchange for a levy on sales of the aircraft. According to Brown, the government has more than recovered its investment.

      https://www.airspacemag.com/flight-today/the-contender-3630193/?page=4

      • Hello OV-099.

        Regarding: “Now, ANNEX B contains the ARGUMENTS OF THE PARTIES. Thus, Annex B does not contain or represent any decision of the Arbitrator.”

        You are right. Thank you for pointing out my mistake. While skimming through dozens or hundreds of pages of documents, I missed that what I was reading was arguments of the US, and not part of the Arbitration Board decision. I was wondering why the writing style was so unlike that usual for the WTO, which I find that I usually have to read through several times, and refer back to WTO rules, to figure out what they are trying to say. Now I know why the writing seemed so different from the WTO’s usual style. I don’t have time right now to check back on everything else that I posted and attributed to the WTO (all is: however, from the WTO website), but based on the dense bureaucratic style of the writing, I’m pretty sure that it all was actually written by WTO employees.

        I am in the habit of trying to provide links to sources for information that I post, or assertions that I make. This is a habit I carry over from my work in scientific fields, where unsourced assertions get cut out of papers before they are published. The value of this habit is I think being demonstrated here, you were able to check my source and point out my mistake.

        • @AP_Robert

          The problem here with your “explanation” is not that you incorrectly reported that the excerpts were written by the WTO arbitration board, but that you deliberately used your “findings” to support your position and that of Boeing/USTR in order to try to discredit and malign fellow commenters on this site.

          Anybody who’s been working in a scientific field knows that it’s his/her responsibility to adhere to some basic principles like transparency and accuracy. He or she would also know that there are various opportunities by which bias can be introduced during data analysis, such as by fabricating, abusing or manipulating the data.

          Also, spiteful and judgemental assertions are cut out of papers before they’re published. Didn’t you know that?

      • Hello OV-099,

        Thank you again for pointing out my mistake in stating that an excerpt that I attributed to the WTO, was actually from the ‘arguments of the parties’ section of a WTO report.

        The excerpt that I misattributed to the WTO, gives a summary of how the US Trade Representative, in year 2019, views the US vs. EU aircraft subsidies dispute. The excerpt from a November 2003 Air and Space Magazine article that you posted, illustrates what an author for Air and Space Magazine thought about the history of Airbus and Boeing, about a year before the filing of the US request for consultations with the EU that resulted in the DS316 case.

        Perhaps of equal interest to what the US Trade Representative thinks in 2019, and what an Air and Space magazine author believed in 2003, is what the conclusions of the May 15, 2018 WTO Compliance Appellate Body report on the DS316 case were, and this time I have triple checked that the excerpt below is from a document published by, and written by, the WTO.

        “Conclusion: Based on its review of the Panel’s analysis, the Appellate Body ultimately upheld the Panel’s conclusion that insofar as significant lost sales in the twin-aisle markets (in which Airbus and Boeing sell the A330, A350XWB, 767, 777, and 787 product families) and significant lost sales and impedance in the very large aircraft markets (the A380 and 747) are concerned, the European Union had failed to comply with the recommendations and rulings of the DSB in the original dispute because the underlying subsidies continued to exist and cause adverse effects. The Appellate Body, however, did not uphold the Panel’s findings of displacement in these two markets or its finding of impedance in the twin-aisle market. With regard to the market for single-aisle aircraft (in which the A320 and Boeing 737 compete), the Appellate Body observed that the Panel’s findings concerned primarily the effects of subsidies that had expired before 1 December 2011 (the time by which the European Union had been required to comply with the recommendations and rulings of the DSB in the original dispute). The Appellate Body was not convinced that the Panel’s analysis in this regard provided a sufficient basis to find that subsidies provided to Airbus continued to cause adverse effects in the market for single-aisle aircraft.

        On this basis, in respect of subsidies existing in the post-implementation period, the Appellate Body upheld, albeit for different reasons, the Panel’s conclusions that “{b}y continuing to be in violation of Articles 5(c) and 6.3(a), (b) and (c) of the SCM Agreement” insofar as the twin-aisle LCA and VLA markets are concerned, “the European Union and certain member States have failed to comply with the DSB recommendations and rulings and … the obligation under Article 7.8 of the SCM Agreement ‘to take appropriate steps to remove the adverse effects or … withdraw the subsidy’”; and that, “{t}o the extent that the European Union and certain member States have failed to comply with the recommendations and rulings of the DSB in the original dispute, those recommendations and rulings remain operative.”

        https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds316_e.htm

        • @AP_Robert

          The excerpt that I misattributed to the WTO, gives a summary of how the US Trade Representative, in year 2019, views the US vs. EU aircraft subsidies dispute. The excerpt from a November 2003 Air and Space Magazine article that you posted, illustrates what an author for Air and Space Magazine thought about the history of Airbus and Boeing, about a year before the filing of the US request for consultations with the EU that resulted in the DS316 case.

          Again, whereas you used your “findings” to support your position and that of Boeing/USTR in order to try to discredit and malign fellow commenters on this site, I merely used the excerpts from the November, 20003 Air & Space Magazine article, as an example, in order to support my opinion that the sense of entitlement and arrogance on the part of Boeing and the US side IMO has truly been breathtaking over the years, since Airbus started to become a serious contender to Boeing.

          The Boeing vice-president, at the time (1985), condescendingly stated that “Europe builds beautiful trains and systems like that. I challenge the concept that everyone has to build everything.”

          Now, it appears that Airbus and the EU have no problems admitting that the company would never have seen the light of day without subsidies, while the US side seem to assume that Airbus cannot possibly compete without subsidies and loans since Boeing and the American way of doing business is vastly superior to that of the European “socialists”.

          Also, while Airbus seems to be content with having a 50 percent market share of the Large Commercial Airliner (LCA) market, the US side (i.e Boeing and the USTR) seem to have an extremely strong sense of entitlement; that it’s a perfectly just right for American LCA OEMs to essentially control the entire world-wide LCA market — and where any market share gain in the LCA business from non-American OEMs is only due to “cheating”, “unlawful subsidies” and “illegal trade practices”.

          Interestingly, it would appear as if the thinking of “the good doctor” Loren Thompson’s (on the matter) accurately represents how Boeing — the company that helps finance his “think tank — has contemptuously viewed how their European competitor has managed to reach market parity.

          Article from the Lexington Institute (Loren Thompson) from 2010:

          (i.e. the same type of nonsense and half-truths have regularily been published by the good “doctor”.)

          CONCLUSION: WASHINGTON MUST ACT TO ELIMINATE UNFAIR SUBSIDIES

          For forty years, European governments have conspired to undermine America’s leading role in the global market for commercial aircraft. The representatives of those governments have made little effort to conceal their intentions, and they have largely succeeded. As a result, tens of thousands of U.S. aerospace jobs have disappeared, and hundreds of billions of dollars in U.S. export earnings have been lost. The World Trade Organization has now found that the subsidies Airbus leveraged to achieve its present market dominance were improper and largely prohibited by prevailing trade rules. To prevent further erosion in the U.S. aerospace industry and trade balance, Washington must take four steps in response to the WTO findings:

          • The U.S. government must forcefully communicate to European governments that further use of illegal subsidies to develop new planes will not be tolerated, beginning with the proposed A350 challenger of the Boeing 787 Dreamliner. The Europeans suggest that the A350 lies outside the scope of the recently decided subsidies case, but it is clear that plans to provide that program with over $4 billion in launch aid would be condemned in any WTO review, so Washington must stop the plans from being executed before additional damage is done to U.S. interests.

          • Because European governments have repeatedly demonstrated that they are unwilling to be honest or helpful in resolving the subsidies dispute, the U.S. government must determine what sanctions it can impose under existing trade rules to compensate for the unfair competitive advantages that Airbus receives. To minimize the likelihood of a spreading trade war, these sanctions — such as tariffs, quotas or other constraints — should be confined to the commercial transport sector where the subsidies dispute originated.

          • The U.S. government must incorporate some redress of unfair Airbus subsidies into current plans for acquiring a new Air Force aerial refueling tanker. The modified Airbus A330 that was offered by a team competing against Boeing in the first round of competition for the tanker contract would not have been developed in the absence of over $5 billion in improper aid. To contemplate making an award without compensating for the unfair advantage the Airbus plane has received would in effect reward bad behavior and penalize Boeing for not engaging in similar impropriety.

          • More broadly, the U.S. government must determine what redress of past European transgressions is necessary to balance the competitive landscape in the commercial transport business. The whole market has now been distorted by the emergence of an aircraft family and pricing structure that would not exist in the absence of illegal subsidies. It is not enough to avert further use of improper aid in the future; steps must be taken to correct the negative consequences that aid has already produced for U.S. companies and their workers.

          These steps will require some time to implement, and they must take into account any further rulings the World Trade Organization makes concerning subsidies. But there is no longer any excuse for delay in acting. America’s global economic standing is under siege, and it cannot tolerate the continued use of illegal measures by other nations to put its exporters at a disadvantage in global markets.

          https://www.lexingtoninstitute.org/wp-content/uploads/EuropeanSubsidiesBrochureFinal.pdf

      • For those who may be wondering how the WTO Compliance Report for the EU vs. US DS353 case compares to the Compliance Appellate Body Report for the US vs. EU DS316 case, of which I posted a summary above, see the excerpt below from the WTO’s summary of the case on the WTO website which, in view of my earlier mistake pointed out by OV-099, I have again triple checked to be an actual WTO opinion, and not an ‘argument of the parties’. The panels ruling was “the EU filed to establish” for claims a, b, d. and e, and “the EU established” only for claim “c”, i.e. the Washington State Business and Occupation Tax Rate Reduction.

        “Overall conclusion
        22.In summary, the Panel found that:

        a.The European Union failed to establish that the effects of certain aeronautics R&D subsidies and other subsidies are a genuine and substantial cause of significant lost sales, significant price suppression, impedance of imports of the A350XWB to the United States or impedance of exports of the A350XWB to various third country markets, or threats of any of the foregoing, within the meaning of Articles 5(c) and 6.3(a), (b), and (c) of the SCM Agreement in the post-implementation period;

        b.The European Union failed to establish that the original adverse effects of the pre-2007 aeronautics R&D subsidies in respect of the A330 and Original A350 continue in the post-implementation period as significant price suppression of the A330 and A350XWB, significant lost sales of the A350XWB, or a threat of impedance of exports of the A350XWB in the twin-aisle LCA market, within the meaning of Articles 5(c) and 6.3(a), (b), and (c) of the SCM Agreement in the post-implementation period;

        c.The European Union established that the effects of the Washington State B&O tax rate reduction are a genuine and substantial cause of (i) significant lost sales of A320neo and A320ceo families of LCA in the single-aisle LCA market, in respect of the sales campaigns for Fly Dubai in 2014, Air Canada in 2013, and Icelandair in 2013, within the meaning of Articles 5(c) and 6.3(c) of the SCM Agreement in the post-implementation period, and (ii) a threat of impedance of imports of the A320ceo to the United States, and a threat of impedance of exports in the market for single-aisle LCA to the United Arab Emirates, within the meaning of Articles 5(c) and 6.3(a) and (b) of the SCM Agreement in the post-implementation period;

        d.The European Union failed to establish that the effects of certain aeronautics R&D subsidies and other subsidies are a genuine and substantial cause of significant price suppression of the A320neo and A320ceo, impedance of imports of the A320neo and A320ceo to the United States, or displacement and impedance of exports of the A320neo and A320ceo to Australia, Brazil, Canada, Iceland, Indonesia, Malaysia, Mexico, Norway, Russia, and Singapore,, within the meaning of Articles 5(c) and 6.3(a), (b), and (c) of the SCM Agreement in the post-implementation period.

        e.With respect to the European Union’s claims under Articles 3.1 and 3.2 of the SCM Agreement and Article III:4 of the GATT 1994, to the extent that the Panel found that the claims were within the scope of this proceeding, and that the measures at issue were subsidies within the meaning of Article 1 of the SCM Agreement, the European Union failed to establish that the subsidies are inconsistent with Articles 3.1(a) and 3.2 or 3.1(b) and 3.2 of the SCM Agreement or with Article III:4 of the GATT 1994.

        23.The Panel therefore concluded that by continuing to be in violation of Articles 5(c) and 6.3(a), (b), and (c) of the SCM Agreement, the United States failed to implement the DSB recommendations and rulings to bring its measures into conformity with its obligations under the SCM Agreement. To the extent that the United States has failed to comply with the DSB recommendations and rulings in the original proceeding, those recommendations and rulings remained operative.”

        https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds353_e.htm

      • “Europe builds beautiful trains and systems like that,” he said in 1985. “I challenge the concept that everyone has to build everything.” If Airbus could not show a profit it should do the right thing and disappear.

        Pretty rich if one keeps in mind that the US got the toolbox of innovations from the UK and Germany. They had success in the postwar years not due to exceptional creativity and inventiveness but just from being advantaged. Euro nations were busy rebuilding and disadvantaged via smaller fragmented units. ( reason why global unhampered trade was a must for the US back then and now is a hate object when other nations have easily overwhelmed the scaling and infrastructure advantages the US had.)

  9. “You’ve (US) managed to kill everyone else, but like a poor marksman, you keep missing the target!”

    The Chinese government who subsidize their commercial aircraft industry (COMAC) is just sitting back watching the two fight it out!

  10. From Reuters

    “While Airbus aircraft built in Europe will be hit with a tariff of 10% after the World Trade Organization allowed Washington to impose sanctions on EU goods, semi-finished fuselages and wings are exempted, an official list showed.

    That means large parts shipped to the deep-sea Alabama port of Mobile from plants in Europe will not be hit by the duties, allowing Airbus to continue to supply U.S.-based airlines with a limited number of locally assembled aircraft

    Also spared by the decision to exempt imported aircraft parts were wings made in Northern Ireland for smaller Airbus A220 aircraft, which had been drawn into a separate row in 2017.”

    https://www.reuters.com/article/us-wto-aircraft-alabama/airbus-plant-in-alabama-spared-fallout-from-u-s-tariffs-idUSKBN1WI04K

  11. I think EU will wait for the decision on their counterclaim.

    1) Gives US govt. something extra to loose, keeps powder dry.
    2) Shows law abiding nature.
    3) The decision comes 9 months prior to US election, just in time for farmers, careworkers, etc to feel the pain. Waiting for the WTO avoids any claim that the timing has been chosen for political reasons.

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