The Wall Street Journal reports that the back-and-forth battle over government subsidies between Boeing and Airbus took a turn in Airbus’ favor today as the World Trade Organization is expected to announce in an upcoming report that Boeing received “massive and illegal government subsidies” from the U.S. government.
Airbus is claiming that the report will show that Boeing received nearly $5 billion in illegal subsidies which cost the company nearly $45 billion in lost revenue. Adding to the $5 billion, the report also notes that Boeing has an additional $2 billion in outstanding subsides from future contracts that are also illegal.
The report also claims that without government subsidies, Boeing would never have been able to launch the 787, a serious accusation considering the amount of time and energy Boeing has devoted to the 787 and the significance that the plane will presumably have on the airline market over the coming decades.
But Boeing rejected Airbus’ assessment that the report says the subsidies amounted to $5 billion and instead painted the ruling as “a sweeping rejection of the EU’s claims” according to The Seattle Post-Intelligencer. Boeing claims that the report shows that Boeing only received $2.6 billion which is small compared to the $20 billion that the WTO ruled in June that Airbus had received in illegal subsidies.
The battle between Airbus and Boeing over government subsidies is consistently murky as both sides often find ways to paint the same rulings in their own positive light. What does seem clear however, is that the WTO does believe that both sides are receiving illegal subsidies through government contracts which violate trade laws and that the battle over which side takes more advantage of these subsidies is very far from over.