WTO rules against Boeing on Airbus complaint over illegal subsidies

Paris/Geneva: In a significant setback for the Boeing Co, the World Trade Organization has backed a European Union complaint against it saying it received at least $5.3 billion in illegal government subsidies, which provided it an unfair advantage over rival Airbus SAS.

WTO judges in Geneva have confirmed findings, previously confidential, that the United States provided aid to Chicago-headquartered Boeing to help it develop aircraft, including the 787 Dreamliner. The aid was passed on through federal research grants and state support.

Airbus parent European Aeronautic, Defence & Space Co (EADS) claimed such aid to Boeing cost it $45 billion in lost sales from 2002 to 2006.

"This report shows Boeing has received huge subsidies in the past and continues to receive significant subsidies," EU Trade Commissioner Karel De Gucht said in a statement in Brussels. "These subsidies have resulted in substantial harm to EU interests, causing Airbus to lose sales, depress its aircraft prices and unfairly lose market share to Boeing."

The 783-page panel report, out Thursday, comes nine months after the WTO concluded Airbus received billions of euros in low-interest government loans from European governments.

It is expected that the ruling in the 6-year-old, transatlantic trade dispute between the world's two largest commercial plane manufacturers may encourage the United States and the European Union to reach a compromise deal with both sides now being faulted over improper conduct.