Boeing says expects appeal of WTO pro-EU subsidy ruling

Boeing’s logo is seen during the Japan Aerospace 2016 air show in Tokyo, , October 12, 2016. — Reuters picBoeing’s logo is seen during the Japan Aerospace 2016 air show in Tokyo, , October 12, 2016. — Reuters picNEW YORK, Nov 28 — Boeing expects the US to appeal a World Trade Organization decision today that struck down a plane-building subsidy offered by Washington state, company representatives said.

The WTO decision was a win for the European Union on behalf of Airbus, which had argued that a Washington state tax benefit to Boeing to build the 777x jetliner was an unfair subsidy which violates global trade rules.

“I fully expect this case will be appealed,” said Bob Novick, an outside counsel representing Boeing, adding that a final resolution of the case might not come until early 2019.

Novick criticised the rationale behind the decision to strike down the Washington state Business and Occupancy (B&O) tax rate as wrongly concluding that the law favoured the domestic manufacturing of goods because Boeing had not imported the wing for the 777x as it had for the 787 plane.

The WTO “jumped to the conclusion that the somehow the law favoured domestic over imported,” he told reporters in a conference call.

The US Trade Representative has not yet commented on the case, but it commonly appeals negative rulings by the WTO.

Boeing said the WTO rejected EU claims that the company had received US$8.7 billion (RM38.8 billion) in subsidies. Boeing estimates the total benefit of the disputed Washington state provision at US$50 million a year, or a maximum of US$1 billion.

Boeing has not received any of the benefits yet under the B&O tax break and does not expect to see any until 2020 at the soonest, Boeing officials said.

“After any appeal, we fully expect Boeing to preserve every aspect of the Washington state incentives, including the 777X revenue tax rate,” said J. Michael Luttig, Boeing’s general counsel. — Reuters

Leave a Reply