Geneva/Paris: The European Union said on Wednesday it had won a victory against US subsidies for Boeing that it hoped would set the stage for a negotiated settlement that would allow European governments to continue to help Airbus develop new aircraft.
"This was a very thorough analysis which in fact supports our view in this dispute," EU Trade Commissioner Karel De Gucht told Reuters during a visit to Argentina.
"I hope that everybody will be convinced that the right way out of this is to have negotiations," De Gucht said after a World Trade Organisation panel issued its confidential report.
"The only way out of this dispute is in fact by finding a negotiated settlement," he said.
Boeing said that if reports about the decision were accurate, "then the ruling amounts to a massive rejection of the EU case and confirms that European launch aid to Airbus stands as the single largest and most flagrant illegal subsidy in the aerospace industry".
The ruling follows WTO condemnation in June of illegal European subsidies for Boeing rival Airbus, mostly in the form of European government "launch aid" loans. It is the biggest bilateral trade dispute ever before the WTO.
Two US sources familiar with the case acknowledged the panel found Boeing had benefited from federal and other subsidies, but to a much lower extent than its European adversaries suggest.
They said the WTO had found subsidies worth about $5 billion, including $2 billion that already has been subject to an earlier settlement.
The $3 billion (Dh 18.36 billion) or so in new subsidies were mainly linked to payments provided to the planemaker by the American aerospace agency Nasa, the US sources said.
But a European source said the EU prevailed in most of the $24 billion of claims it had brought over allegations of unfair federal, state and local aid to Boeing.
A second European source, this one a government official, said whether the report found $5 billion or even $15 billion in subsidies was not the important issue.
"Our reading is that this is an absolutely seminal victory for Europe in the sense that Boeing has claimed for many years they were a stock-listed company operating according to market rules and they didn't violate the WTO, the official said.
"I think this report puts that straight by saying in equal measure that US subsidies to Boeing have damaged Airbus as certain EU subsidies to Airbus have damaged Boeing," he said.
The report, issued only to EU and US officials, will not be made public until possibly mid-2011. Boeing's share price closed a bit lower on Wednesday at $62.73.
No comparison — Boeing
Boeing argued that any aid for which Washington was faulted paled in comparison with subsidies for Airbus that were denounced by the WTO in a ruling in a parallel case.
"Nothing in today's public reports on the European case against the US even begins to compare to the $20 billion in illegal subsidies that the WTO found last June that Airbus/EADS has received," the company said. The company's champions in Congress — including Washington state Senator Patty Murray and Kansas Senator Sam Brownback — said what they had been told about the ruling supported Boeing's statement. "The two decisions are not in the same ballpark or even the same league. Anyone who says they are isn't telling the real story," Murray said.
But Alabama Senator Richard Shelby said the panel report meant Boeing and its allies "can no longer rationally claim" that only Airbus receives government support. "In fact, it is quite the contrary," he said.