The long running trade dispute between the European Union and the U.S. over illegal trade subsidies given to Airbus (called "Launch Aid") reached a significant milestone yesterday. The World Trade Organization (WTO) ruled that Launch Aid constituted an illegal subsidy, and must be stopped immediately within 90 days. Launch Aid helped to fund most of Airbus' airplane programs, most notably the development of the super-jumbo A380. That was deemed to be an illegal subsidy, although similar aid for the A350 (a direct competitor to Boeing's 787 and 777) was ruled to be a legal subsidy. Check out the case scorecard link below for a list of Airbus programs and related infrastructure for which illegal subsidies were provided. As to what this means now for the upcoming U.S. Air Force Tanker replacement contest remains to be seen, since Airbus' offering is based on a A330 platform (which was deemed to have received illegal subsidies during its development). An expected decision on a countersuit against Boeing claiming that it also received illegal subsidies from state governments and the Pentagon is expected to come July 16th.
WTO Case Scorecard
News Link
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