Airbus-Boeing Dogfight Is Coming to a Head

 In State

Why the Boeing vs. Airbus Fight Is Coming to a Head (excerpt)

Making air­planes is one of the most pres­ti­gious things coun­tries can do, a tes­ti­mo­ny to their tech­ni­cal skills, engi­neer­ing prowess and aspi­ra­tions on the world stage. It can be a source of nation­al pride, but also a flash­point. Nothing illus­trates this more than the global rival­ry of Boeing Co. and Airbus SE, the Coke and Pepsi of the skies.

An almost 16-year-old trade dis­pute is coming to a head as the U.S. and European Union pre­pare to launch a bar­rage of tar­iffs, sub­ject to a fur­ther World Trade Organization ruling, on each other’s exports.

1. What’s the fight about?

State aid, the increas­ing­ly common prac­tice of gov­ern­ments doling out sup­port to key man­u­fac­tur­ers or indus­tries. In 2004 the U.S. lodged a WTO legal case against the EU for its member state sup­port to Airbus. In 2011 the WTO ruled that the EU pro­vid­ed Airbus with bil­lions of dol­lars of ille­gal sub­si­dized financ­ing that enabled Airbus to launch its wide-bodied and short-haul planes. The EU opened a par­al­lel case against the U.S. that argued Boeing ben­e­fit­ed from state sub­si­dies as well as space and mil­i­tary con­tracts, which defrayed the cost of civil­ian air­craft devel­op­ment.

In 2012 the WTO deter­mined Boeing had received at least $5.3 bil­lion in ille­gal U.S. aid. The cases con­tin­ued to wind their way through the WTO dis­pute process until 2019, when the WTO autho­rized the U.S. to retal­i­ate with tar­iffs against $7.5 bil­lion worth of EU exports. Due to a timing lag, the WTO won’t issue a retal­i­a­tion award in the EU’s com­plaint about Boeing until some­time this fall. (end of excerpt)

Click here for the full story, on the Bloomberg web­site.

-ends-

Defense Aerospace source|articles

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