The WTO delivered its final ruling in case DS316 against Europe with both Airbus and Boeing claiming decisive victory over the other party. The initial ruling for the European case (DS353) is due around June 2010.
Airbus’ press release commenting on the ruling seemed to omit key facts, but here’s a differing perspective on the seven items listed in the statement.
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1. 70% of claims may have been rejected, but the 30% that Airbus declines to detail could well be more damaging than they’re prepared to admit. It could just as easily be that Airbus hasn’t gotten round to looking at the rest of the report, but either way, Boeing claims that the “United States has prevailed on all of the major issues in the WTO’s final decision, which reaffirms its earlier interim decision, in the U.S. case against European subsidies to Airbus.”
2. If the mechanism for loans is legal, why then in point 4, does it “contain a certain element of subsidy”? (Rhetorical by the way…no response needed or wanted)
3. The US will almost certainly push for measures to ensure compliance with the portions of the ruling Airbus declined to comment on in its press release. It’s natural to surmise that these elements require detail analysis prior to either commenting on or indeed working into its appeal.
4. Past loans forming elements of subsidies will impact all Airbus jets from the A300 through to the A380 except the A350XWB, meaning that losses on the A340 and A380 could well get bigger if forced to pay back such subsidies as part of compliance with the WTO ruling.
5. The possibility of the USA filing a new, specific case against the A350XWB seems to be heightened, not diminished. Funding allegations may have been rejected for this case (DS316), but cannot be ruled out under a new filing and if, as Airbus states the A350XWB is exempt under this case, the US will want to press home its advantage for the 787 before the first A350XWB has even flown by aiming for the funding earmarked by Europe.
6. Rejecting claims of material injury does not mean that the Boeing allegations were false. It means they weren’t upheld – big difference. Classic example of Airbus’ policy of misinformation at work.
7. Research grants were always going to impact both cases, this is not surprising. Both are guilty of using and circumventing such funds for development in commercial and defense interests.
That Airbus elected not to include Japan into its filing against Boeing speaks volumes.
It’s one thing to label the 787 as the most subsidised airplane in history, but quite another when we note that Japanese Government aid to the Fuji Heavy Industries, Mitsubishi Heavy Industries and Kawasaki Heavy Industries was not requested by Boeing – these three companies sought assistance themselves from the Japanese Government to take a bigger risk-sharing stake in the 787 by way of capital outlay for machinery, tooling and other associated factors for participating on the program.
As Boeing’s legal counsel had stated previously, the cases are not linked nor will they drag on for years as Airbus continues to wrongly state. Negotiations may still feature but the critical point now is that Airbus will be working on two things – working towards an appeal and working towards compliance on the WTO findings.
Non-compliance would almost certainly ignite a trade war that Europe would never recover from, not that the USA would gain much either.
In the same manner, once the final ruling on the case against the USA emerges later this year or early next year, the exact same compliance issues will be at the forefront for Boeing.
