WTO to rule on Boeing subsidies

/ Source: msnbc.com staff and news service reports

The World Trade Organization is expected to rule Wednesday that huge subsidies paid to Boeing since the early 1990s are illegal, say media following the dispute.

The ruling would equalize the score in the epic legal fight between Chicago-based Boeing and France-based Airbus SAS, said the Telegraph of London.

The WTO will give its opinion to the United States and the European Union, which filed counter-cases in September 2004.

The EU claims Boeing received $24 billion in illicit aid, including $16 billion in grants from NASA and $2.1 billion in export tax discounts, plus subsidies from the Pentagon.

The panel also is likely to condemn $5.7 billion in aid for Boeing's 787 Dreamliner, the Telegraph said.

In June, the WTO ruled on the U.S. complaint and found Airbus benefited from $4 billion in support from European governments to launch the A280 superjumbo jet, Bloomberg News reported.

The EU in 2007 claimed the U.S. support, plus support from state governments, "clearly aims at weakening Airbus’ position and competitiveness and boosting that of Boeing,” Bloomberg said.

Businessweek said Airbus views the cases as key to resolving a wider dispute over government aid to aircraft makers.

But Boeing disagrees, Businessweek said, quoting Ted Austell, vice president, trade policy at Boeing: "The two cases are completely separate and deal with very specific issues. The WTO ruled very clearly at the end of June that all government money provided to Airbus for development of new aircraft was an illegal subsidy and must stop. That debate is over and it is time for compliance. Should the WTO find against U.S. practices, Boeing is prepared to accept compliance with the ruling."

Airbus has a different point of view, Businessweek reported.

"Only with two reports on the table will there be a window for a balanced discussion, which will be the only way out of this destructive and anachronistic dispute," Airbus spokeswoman Maggie Bergsma told the magazine.