US Appeals to WTO over Airbus Subsidies, EU Counters against Boeing
The US decided to open a major trade battle with Europe over alleged illegal subsidies to Airbus Industries. When Monday’s negotiations fell apart, the US appealed to the World Trade Organization. The EU, noting that Boeing has received some public money of questionable cleanliness, countered with a WTO complaint of its own. This is moaning match will wind up costing consumers more when the WTO rules that both sides have been cheating and allows punitive responses.
The Yanks complaint includes an allegation that Airbus got about $15 billion in “launch aid” from the governments of France, Germany, Spain and the UK. The EU Commission replied that it was annoyed with the $23 billion various US agencies have given Boeing since 1992. The state of Washington has offered $3 billion in tax breaks to Boeing related to the production of the new 7E7.
Both sides are guilty as sin in this. Airbus has been a protected infant industry for the entire 35 years of its existence. Boeing is in effect a subsidiary of the Department of Defense that does a sideline in civilian planes. With American elections less than a month away, it looked like time to someone to make noise about being pro-America in trade – ironic from an administration that has shipped about a million more jobs overseas that it has created.
After a 60-day consultation period, the WTO will get actively involved, and one hopes the political pressure will abate and a deal can result. If not, when the WTO agrees that both sides have been subsidizing their aircraft makers, retaliatory tariffs will be authorized for both the EU and the USA.
The WTO will, as a result, wind up letting governments on both sides of the Atlantic raise punitive tariffs – after acting illegally in the first place. The WTO will become an overt accomplish in the taxing of the consumer to benefit the aerospace industry. This isn’t what the world was promised under the banner of “free trade.”
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