Cantwell Hails WTO Ruling as Victory for Washington Aerospace Workers

World Trade Organization finds European Union ignored compliance rules, must end illegal subsidies to Airbus

WASHINGTON, DC – Today, U.S. Senator Maria Cantwell (D-WA) applauded the announcement that the United States was successful in its World Trade Organization (WTO) case against with the European Union (EU) and four of its member States regarding trade-distorting subsidies to Airbus. Cantwell is a senior member of the Senate Finance Committee which oversees international trade.

In today’s ruling, the WTO compliance panel found that not only did the EU fail to remedy the $18 billion in subsidies previously found in a 2011 ruling, but it further breached international trade rules by granting more than $4 billion in new subsidized financing for the A350 XWB, causing tens of billions of dollars in adverse effects to the U.S. aerospace industry, including Boeing, its workers and its suppliers.

With more than 132,000 workers in aerospace related jobs and 1,350 aerospace companies in Washington, this ruling is an important victory for Washington state’s economy and its aerospace industry.

“This is the largest trade ruling from WTO in history - and they have sided with US manufacturers.  The $22 billion in unfair trade subsidies to Airbus from the Europeans are illegal and must stop.   This is a huge victory for Northwest aerospace workers who have been building world-class airplanes for years. With this decisive ruling, it is now time for the EU to come to the table and settle, rather than waiting for future tariffs. Without having to compete against illegal, market-distorting practices, Boeing should win more sales around the world. I’d like to thank President Obama, Ambassador Froman and the USTR personnel for the many years of hard work that brought us to this decision,” said Senator Cantwell.

Cantwell has been a staunch advocate for stronger trade enforcement. She has spoken out about the need for the Europeans to end launch aid for the last decade. In 2005, Senator Cantwell and Senator Murray led the U.S. Senate to pass a resolution calling on European governments to reject Launch Aid for Airbus and calling on the President to take any action necessary to protect American aerospace jobs.  In 2015, the Senate Finance Committee passed Cantwell-led amendments to increase resources to agencies responsible for the enforcement of free trade agreements.

Background on WTO Compliance Panel Decision

The compliance panel found that since 2006, subsidies to the Airbus A320 family of aircraft resulted in the displacement or impedance of Boeing 737s in the EU, Australia, China, and India markets, as well as lost sales of 271 737s.

In the twin-aisle market, which includes Boeing’s 767, 777, and 787, the panel found that the subsidies benefitting the A330, A340, and A350 XWB caused displacement or impedance of Boeing aircraft in the EU, China, Korea, and Singapore markets, as well as lost sales of 50 Boeing aircraft.

When it came to the largest aircraft– – the panel found that subsidies benefitting the A380 caused displacement or impedance of Boeing 747s in the EU, Australia, China, Korea, Singapore, and UAE markets, as well as lost sales of 54 Boeing aircraft.

In total, the panel found that nearly $22 billion in subsidized financing from the EU and Germany, France, the UK, and Spain caused tens of billions of dollars in lost U.S. exports.

Additional Background Information

In June 2011, the WTO found that the EU and four of its member States (Germany, France, the UK, and Spain) conferred more than $18 billion in subsidized financing to Airbus and had caused Boeing to lose sales of more than 300 aircraft and to lose market share throughout the world. In fact, in looking at the effect of the EU subsidies, the Appellate Body agreed with the Panel that “[w]ithout the subsidies, Airbus would not have existed… and there would be no Airbus aircraft on the market. None of the sales that the subsidized Airbus made would have occurred.” In contrast, the WTO rejected the EU assertion in the EU’s counter-complaint that U.S. subsidies were responsible for the viability of Boeing’s large civil aircraft production.

The Boeing Company is the only American producer of large civil aircraft and is the largest single U.S. exporter. Boeing employs more than 157,000 people, including 79,232 in Washington state, and sold $31.8 billion worth of commercial aircraft in 2010. Boeing is the largest American manufacturer of commercial jetliners, and has 1,740 suppliers throughout Washington state.