Statement by ITIF President Robert D. Atkinson on WTO Ruling in Boeing-Airbus Dispute

June 30, 2010

"Though it is a victory for the United States, this ruling serves as a reminder of the rampant distortions in the global marketplace. The long-running dispute with Europe over Airbus also reflects an understanding by U.S. policymakers and the WTO that Airbus thrives because of subsidies.  Without the diligent enforcement of trade rules against such subsidies, Boeing would stand to lose market share and possibly be forced out of business, with the loss of thousands of good paying American jobs," said Atkinson. "We would have been kidding ourselves if we had assumed the market would allocate capital into new enterprises where Boeing employees could readily find jobs. Both Republican and Democratic administrations understood this reality and wisely pursued this case over the years to today's milestone. It is critical for the United States to continue to be vigilant in fighting protectionism and mercantilism by our trading partners. For free trade to succeed, all actors must actually engage in it."

Background:
The heart of the six-year-old dispute between the United States and the European Union is subsidies. The U.S.-based Boeing argued that Airbus no longer needs a variety of subsidies, such as launch aid and loans. Europe's Airbus countered that the U.S. was aiding Boeing by funneling subsidies through military research funds, presenting an unfair advantage over Airbus.

 

On June 30, 2010, a World Trade Organization dispute settlement panel ruled in favor of the United States. The panel determined that subsidies provided by European countries to Airbus adversely affected U.S. businesses and workers and recommended that Airbus take steps to withdraw the subsidies.

 

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