From the WSJ:
The Journal reported that the WTO in its interim ruling classified every launch aid package given for the A380 passenger jet as an illegal subsidy.
ADDED: Let the debate over what the ruling actually says commence. From Reuters:
Comments that the World Trade Organization on Friday backed a U.S. complaint against European Union aid to plane maker Airbus are wrong and misleading, EU sources with knowledge of the WTO ruling said.
"The ruling is not a black-and-white case. It simply is not a great victory for the United States," one source told Reuters on condition of anonymity.
"The claim that the WTO ruled that subsidies given (by the EU) to Airbus for their A380 plane were illegal is wrong and misleading."
More from Reuters here:
The World Trade Organisation has held back from ruling that all aid for the Airbus A380 was illegal, a European source said on Friday, contradicting a report that the trade body had issued a sweeping rejection of government loans Airbus received to develop the superjumbo.
The source indirectly indicated that some of the funding -- which the European Union calls 'reimbursable launch investment' and the United States regards as illegal 'launch aid' -- had fallen foul of a confidential ruling by the global trade body.
However the source said the draft WTO report had dismissed 70 percent of U.S. claims over aircraft subsidies, which Washington believes damaged Boeing to the tune of $205 billion.
'Contrary to media reports, the A380 reimbursable launch investment has not been judged a prohibited subsidiy in its totality,' the European source, who is familiar with the defence arguments used in the case, told Reuters.
So launch aid is not a prohibited subsidy "in its totality." Does that mean that only specific payments were found to be prohibited subsidies?
BACK TO THE U.S. SIDE:
From the Olympian:
"Not only did they rule the subsidies were illegal, they ruled they have caused material harm to Boeing," the source said.
That last bit sounds like an adverse effects finding under the actionable subsidies provisions.
THE BIG QUESTION:
For me, here's the big question about the ruling: Can the findings on launch aid be used to bring launch aid not specifically challenged in this dispute within a DSU Article 21.5 compliance panel's jurisdiction as a "measure taken to comply"? That is, is there a basis for the U.S. to argue that the grant of future launch aid means that the EU is not complying with the ruling?
MORE NEWS REPORTS:
From the FT:
While the WTO found that some of the €3bn in repayable launch aid – state funding to develop new aircraft – for the A380, the world’s biggest passenger jet, were tantamount to government subsidies, the panel also noted that launch aid can be a viable option for financing aircraft. This will be seen as a considerable victory for the European position.
One European source in Brussels said: “The draft report has dismissed 70 per cent of US claims about alleged EU subsidies to Airbus. It has also confirmed that repayable launch aid is a permissible way to partner with governments.”
I wonder what it means to say that launch aid is a "viable option" or is a "permissible way to partner with governments." Does this just mean that the terms cannot be too favorable?
