Boeing, Airbus claim victory over WTO ruling on subsidies

The US aerospace giant Boeing and its European rival Airbus both claimed victory over a landmark World Trade Organisation (WTO) ruling on their dispute over state subsidies.

Authorities in the European Union and the United States kept mum on the contents of the 1,000-page confidential judgment transmitted by the WTO only to the two parties involved in the litigation.

But the two aircraft manufacturers hailed the outcome of the dispute, brought by Washington against the EU over alleged subsidies paid to Airbus.

"This is a powerful, landmark judgment and good news for aerospace workers across America who for decades have had to compete against a heavily subsidised Airbus," Boeing said in a statement.

Boeing referred only to news reports, which it said, "indicated that the United States has prevailed on all of the major issues in the WTO's final decision".

At least four US lawmakers claimed the WTO had ruled that Airbus had benefited from "illegal" European government subsidies for their planes. But Airbus claimed in a statement that the ruling rejected "70 percent of the US claims".

The panel "refused the US request for remedies as legally inappropriate", Airbus claimed. In its complaint lodged in 2004, Washington charged that the European Union had illegally provided subsidies worth up to $200 billion (Dh734bn) to Airbus.

It said an accord allowing Brussels to provide up to a third of development costs of new airliners was no longer valid since Airbus had by then become a major industry player and was not the fledgling firm it was when the deal was struck.

On the same day, the EU retaliated with a complaint against Washington's help to Boeing, accusing the United States of violating international trade rules by funnelling subsidies to civil aviation through military research funds.

Some $23 billion (Dh84.41bn) of subsidies were masked as defence research, Brussels claimed.

Firms bullish on Latin American outlook

Global plane-making rivals Boeing and Airbus shared optimistic views on Latin America over the next 20 years where the market was seen outpacing the world by as much as 30 per cent.

Airbus, owned by the European aerospace group EADS, projects sales of 200 additional aircraft in Latin America over the next five years, part of what it called an extraordinary period with $150 billion (Dh550.5bn) of regional demand over 20 years.

Rafael Alonso, the company's Vice-President for Latin America and the Caribbean, told Reuters that Latin America will need 1,700 new planes in the next 20 years, growth of more than five per cent a year. "That translates into $150bn in sales," Alonso said.

The 200 new aircraft sales for Airbus would be in addition to the 250 already on order for the next five years in the region, where it says it has a 65 per cent market share.

Chicago-based Boeing said the Latin American market was growing 30 per cent faster than the world average, though its Latin American demand figure was lower than Airbus' at 1,640 airplanes over the next 20 years.

Still, it expects Latin American air traffic to double over the next 10 years based on overall economic growth.

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