EU Studying If U.S. Has Complied With WTO’s Boeing Ruling

The European Union is examining a U.S. notice saying the Obama administration has complied with a World Trade Organization ruling that found Boeing Co. (BA) received illegal government subsidies.

“We will now immediately review their compliance package to check whether the U.S. have taken the necessary steps to end these subsidies and their adverse effects,” John Clancy, the EU’s trade spokesman, said in an e-mailed statement from Brussels today.

The U.S. Trade Representative’s office in Washington issued a statement late yesterday -- the deadline to obey the rulings and recommendations in the case -- saying it had worked “extensively over the last six months” with NASA, the U.S. Department of Defense, the State of Washington and the City of Wichita to ensure “full compliance” with the WTO’s findings.

WTO appellate judges concluded on March 12 that Boeing had received illegal subsidies totaling at least $2.6 billion in the form of U.S. government research and defense contracts. The judges also affirmed the initial panel’s “adverse effects” finding while partially reversing other rulings involving subsidies in the form of tax breaks.

The Geneva-based WTO has also found that Airbus SAS, owned by European Aeronautic Defence & Space Co., received billions of euros in illegal government subsidies. While the 27-nation EU says it has removed the subsidies and is now in compliance with global trade rules, the U.S. has asked the WTO to approve retaliatory sanctions of as much as $10 billion for the EU’s failure to comply.

WTO members agreed on April 13 to set up a dispute panel to probe the U.S. allegation that not only are the banned subsidies still in place, but European governments have provided new illegal aid to the planemaker since the trade arbiter issued its ruling.

To contact the reporter on this story: Jennifer M. Freedman in Geneva at jfreedman@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net

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