A fair and balanced trade environment and an integrated and smoothly-functioning global supply chain is the foundation of the global aviation industry. Airbus’ position has always been: no one wins in a trade conflict and all benefit from open markets and a level playing field.
Trade wars are not inevitable and can be avoided. We need to achieve a reasonable resolution to these disputes to protect the future of the global aviation industry and thousands of jobs on both sides of the Atlantic. I call on Boeing to reconsider its actions before it is too late. We stand ready to reach a fair settlement but we will not be bullied into an unfair one.
Tom Enders – CEO Airbus
Latest statement on WTO disputes from John Harrison, Airbus General Counsel, at the Airbus Annual General Meeting on 11 April 2018:
It is important at this point to say a few words about the WTO dispute between the U.S. and Europe over aircraft manufacturing since we expect further aggressive posturing by Boeing in the next weeks around the release of the latest reports from the WTO, first on Airbus, then on Boeing.
The WTO has consistently ruled that the Airbus loans are less damaging to global trade than the tax breaks and research grants Boeing receives, which have cost Airbus an estimated $100 billion (USD) in lost sales. The conflict persists because Boeing continues to receive massive grants to fund its programmes, including most recently $9 billion (USD) in 777X subsidies and yet-unquantified support for the 797. This grab for cash persists even as Boeing demands that European governments unilaterally end their repayable loan partnerships with Airbus. We want to make you aware of our position now before Boeing tries to speak on our behalf: Airbus (and the European Commission) has always sought a negotiated settlement, ideally as a global sector agreement. It has been Boeing which has encouraged confrontation.
The aviation industry relies on a global supply chain. Boeing’s cynical manipulations could destroy this supply chain and the jobs it creates as by undermining fair competition to provide high-performing aircraft at lowest cost. The sad truth is that there is never a winning side in a trade war, just degrees of loss. Airbus has always advocated fair and balanced trade in the aerospace industry in which government support is an integral part because of its development characteristics and the strategic impact of the sector on its technology and economy and jobs. Airbus will continue to seek opportunities for a global and balanced sector agreement. However, Airbus will also protect its own interest and defend its position to avoid giving its competitors an unfair advantage in a competitive market place.
How are modern transport aircraft built?
Why then these trade disputes in aerospace?
What’s happened lately in this dispute?
Who wins in this dispute?
Is there any way out of this dilemma?
The current disputes have been percolating for years. Recent events have thrown them back in the limelight. Below is a timeline of the key developments.
1992 - The United States (“U.S.”) and the European Communities (now the European Union, “EU”) concluded a bilateral agreement (“1992 Agreement”)
2004 - Boeing prompted the United States to unilaterally and unexpectedly withdraw from the 1992 Agreement and to immediately file a complaint at the WTO over all EU support ever granted to Airbus, including the support that was previously agreed to by the U.S. in the 1992 Agreement. The EU followed suite, filing a complaint against direct support to Boeing in the form of government grants and regional tax breaks.
2010 - WTO and its Appellate Body rule that US and EU received WTO-inconsistent subsidies
2012 - US and EU challenge respective measures taken to comply before the WTO
2016 - WTO panel finds that neither US nor EU have fully complied with WTO recommendations.
Airbus is not a purely European business. It has a vast and significant supply chain spanning markets around the world to produce its aircraft.
Airbus has communicated regularly on this issue. The links below lead to interviews, press releases and financial statements that cover trade topics:
16 October 2017 - Airbus and Bombardier Announce C-Series Partnership
4 September 2017 – WTO will move on to judge actionable Boeing subsidies to 777X
9 June 2017 - WTO condemns Boeing’s non-compliance and new subsidies
12 March 2012 - Sweeping Loss for Boeing in WTO Appeal
1 December 2011 - Airbus Reports Full European Implementation of WTO Findings
18 May 2011 - WTO final ruling: Decisive victory for Europe
30 March 2011 - Truth goes public: WTO condemns massive illegal Boeing subsidies
31 January 2011 - WTO ruling: Billions in Boeing subsidies distort competition
WTO and European Commission statements and releases
Additional perspective on civil aircraft trade and compliance is available from the following links:
15 May 2018 - WTO rejects vast majority of US claims in Airbus dispute
22 September 2016 - WTO Issues a Report on EU Compliance with Airbus Case Ruling
22 September 2016 - WTO panel issues compliance report on US challenge to EU aircraft subsidies