Airbus v. Boeing at the WTO: Only the lawyers win

The tit-for-tat legal battle between Airbus and Boeing at the World Trade Organization could, after 15 years, be fairly described as epic.

When Airbus scored a major win in 2016, the company’s then chief executive Tom Enders said the protracted WTO tussle “benefits only the armies of lawyers both sides employ for more than a decade”.

The world’s two aviation giants do not face each other directly at the WTO’s Dispute Settlement Body, with Boeing represented by the United States and the European Union acting for Airbus.

The hostilities have continued unabated since 2004, when Washington declared that a 1992 US-EU agreement governing subsidies in the aircraft industry was dead.

Here is a summary of the cases that have been brought to date, as fears rise that the row could escalate after the WTO cleared Washington to impose tariffs on $7.5 billion worth of European products to counter support given to Airbus.

– US vs Airbus –

Washington fired the first shot in 2004, accusing Britain, France, Germany and Spain of providing illegal subsidies and grants to support the production of a range of Airbus products.

In 2010, WTO judges delivered a mixed ruling, saying some of the support given to Airbus was prohibited while other parts were permitted under international trade law.

The next eight years saw appeals and counter-appeals over both the substance of the rulings and then over whether the EU had adequately amended its behaviour to comply with the rulings.

WTO rules do not allow decisions by arbitrators to be appealed but that does not mean Wednesday’s decision marks the end of the case.

Following an EU request, the WTO in August 2018 set up a new panel to take another look at whether Brussels had started following the rules.

That panel is expected to issue its ruling next year and could theoretically force the cancellation of the US tariffs finding.

– EU vs Boeing –

In a complaint opened in June 2005, the EU alleged that Boeing had received $19.1 billion worth of prohibited subsidies from 1989 to 2006 from various branches of the US government.

WTO judges said in a 2012 ruling that roughly a third of the subsidies in question were illegal.

The US said it would make changes to comply with ruling.

Various suits were then filed over several years, largely over the question of whether US federal and state governments were actually complying with the ruling.

Last month, WTO judges found that the US had failed to fully remove all the prohibited subsidies.

Brussels is demanding permission to slap tariffs on $12 billion in US goods as punishment but the WTO is likely to decide on a lower number in a decision that could come in about six months.

– Brussels vs Washington state –

In 2014, the EU initiated a third case challenging tax breaks and other incentives provided by Washington state to support production of Boeing’s 777X, which is set to take to the skies in 2020.

It has been dubbed the “baby Boeing” case, given its narrower scope than the others.

In 2017, WTO judges said Washington state’s subsidies were legal in a decision that was not subject to appeal.

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