Airplane maker Boeing (NYSE: BA) received billions of dollars in questionable subsidies from the U.S. government according to a study by The World Trade Organization (WTO) which was presented on Monday to officials of the U.S. and the European Union (EU).
The report on Boeing is confidential and will not be published for several weeks or months – nonetheless, the company’s European rival Airbus stated last week that the report would reveal the scale of illegal subsidies Boeing had obtained.
This solid report sheds further light on the negative consequences for the EU industry of these US subsidies and provides a timely element of balance in this long-running dispute, said John Clancy, a spokesman for EU Trade Commissioner Karel De Gucht
The report, Airbus claims, found that Boeing received at least $5 billion in subsidies that the WTO has determined to be illegal.
Also, the WTO determined more than $2 billion in state and local subsidies that Boeing will receive in the future are illegal.
Airbus estimates it has already lost a minimum of $45-billion in sales as result of Boeing’s subsidies.
WTO experts have already determined that Airbus has also received illegal subsidies from European governments.
Boeing countered that the “research and development grants” it received are minuscule compared to the financial support provided to Airbus, some of which equate to export subsidies which are totally illegal under WTO rules.
The litigation has been ongoing since 2004 and government officials on both sides of the Atlantic Ocean have periodically urged negotiations to settle the dispute once and for all.
The WTO report might influence a decision in the next few weeks by the U.S. Air Force on whether to grant Boeing or Airbus’ parent, European Aeronautic Defense and Space Co.
(EADS) a contract valued a between $25-billion and $50-billion for refueling tankers.