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WTO Affirms Decision In Boeing Subsidy Case

by Ulrika Lomas, Tax-News.com, Brussels

02 October 2017


The WTO's Dispute Settlement Body has formally endorsed the Appellate Body's decision to reverse a previous panel ruling that a tax break provided by Washington State to Boeing is a prohibited subsidy.

In November 2016, a WTO panel found that Washington State's reduced business and occupation tax rate for the manufacturing or sale of commercial airplanes under the Boeing 777X program is a prohibited subsidy. The US appealed to the WTO's Appellate Body and the EU cross-appealed.

On September 4, 2017, the Appellate Body reversed the panel's finding that the measure constituted a prohibited subsidy. It found that the panel had not properly established that the lower business and occupation rate was de facto contingent upon the use of domestic over imported goods.

On September 22, the DSB adopted the Appellate Body report and the panel report, as modified by the Appellate Body.

The DSB said that the US said that the panel and Appellate Body reports affirmed that it "had not granted prohibited subsidies to Boeing." It added that, according to the US, the EU "had long pursued claims at the WTO to validate its view that its billions of dollars of subsidies for Airbus were comparable to supposed US subsidies for Boeing, but at each stage the WTO has found that there is no comparison."

The US has "called on the EU to finally negotiate and find a solution that would end its WTO-inconsistent subsidies," the DSB said.

TAGS: tax | business | aviation | World Trade Organisation (WTO) | manufacturing | trade disputes | United States | trade | European Union (EU) | Europe

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