Boeing wins subsidies dispute with Airbus after WTO reverses decision

Sept. 4 (UPI) -- Aircraft manufacturer Boeing declared victory on Monday in a contentious trade dispute with Airbus and the European Union.

In a reversal of an earlier decision, the World Trade Organization announced a local subsidy given by Washington State to Boeing did not constitute a violation of international trade rules.

"The WTO has rejected yet another of the baseless claims the European Union has made," Boeing announced in a statement.

Over the last several years, Washington State has granted the Chicago-based Boeing some $8.7 in tax incentives to ensure the company developed and built its 777X jetliner in Washington. Last year, the WTO decided those subsidies violated trade rules.

Backed by the United State government, Boeing appealed the ruling, and on Monday, the three-judge appellate panel reversed the original decision. The panel determined the tax incentives were not a violation of trade rules and that Boeing had not unfairly favored domestic parts over imports during the building of the 777X.

The latest ruling settles just one of three pending trade disagreements between U.S.-backed Boeing and EU-backed Airbus.

Building airplanes is extremely expensive and both companies enjoy government assistance. For more than a decade, however, the two giants have been fighting over how much help the other is getting and in what form.

The WTO originally found both Boeing and Airbus to have been illegally subsidized, and neither the U.S. nor European Union have -- with a series of claim and counterclaims -- been able to convince the World Trade Organization otherwise.

"The 'game' is far from over," Rainer Ohler, executive vice president for communications at Airbus, said in a statement.

"European governments have provided billions of dollars in illegal subsidies to Airbus for years, yet they have tried and failed to create a false equivalence with the United States and Boeing," countered U.S. Trade Representative Robert Lighthizer. "Today's WTO report further confirms that the EU cannot justify their own illegal subsidies by hiding behind groundless claims against the U.S."

If WTO remains unmoved by the two companies' explanations for alleged illegal subsidies, both the U.S. and EU could end up levying tariffs against one another.