Wednesday, May 18, 2011

Boeing/Airbus Saga Continues

The World Trade Organization's Apellate Body issued a report overturning part of the Panel's decision in the ongoing dispute between the United States and European Union concerning the latter's subsidization of Airbus.  See WTO Overturns Part of US Aid Complaint Ruling on Airbus, AFP, May 18, 2011 (available here).  Even so, U.S. Trade Representative Ron Kirk is touting the decision as a victory for the United States.  According to the Apellate Body, Airbus still received $18 billion in subsidies which are inconsistent with WTO rules.

It is unclear what, if any, impact today's decision will have on pending EU plans to bolster the competitive position of its aircraft manufacturing giant.  The EU still has a complaint concerning alleged U.S. subsidization of Boeing pending before the WTO, though it could be more than a year before the Apellate Body issues a report on the matter.  In the meantime, both sides would do well to come together to work out a new agreement on the proper scope of injecting aid into their respective aircraft industries.  With emerging economies such as China and India exploring the possibility of expanding their presence in the market, the dispute over subsidies will likely have global implications in the near future.

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