WTO Says Boeing Subsidies Illegal, US Declares Victory (BA, EADSY)

The World Trade Organization (WTO) has upheld a lower panel’s ruling that Boeing Co. (NYSE: BA) received illegal subsidies and payments from US local, state, and federal governments amounting to several billion dollars. The case against Boeing and the US began in 2005 and the panel finally ruled on it a year ago, in March 2011.

The Office of the US Trade Representative (USTR) said in an official press release:

[T]he United States has prevailed in a World Trade Organization (WTO) dispute over claims by the European Union (EU) related to The Boeing Company. The WTO Appellate Body rejected claims that the United States has provided massive trade-distorting subsidies to Boeing and affirmed a dispute settlement panel’s March, 2011 finding that most of the programs challenged by the EU were not subsidies. Further, the Appellate Body affirmed that the value of WTO-inconsistent subsidies was far below what the EU alleged.

According to the USTR the WTO found that $3-$4 billion were illegal subsidies, compared with an intial panel determination of $19 billion. The USTR also noted that in similar case brought by the US against European airplane maker Airbus, the European Aeronautic Defence and Space Co. (OTC: EADSY.PK) had provided $18 billion in subsidized funding to Airbus.

The WTO ruling is available here and the USTR press release is available here.