Both the World Trade Organization (WTO) and the European Commission have criticized the United States for providing aircraft manufacturer Boeing with $8 billion in illegal subsidies, despite its agreement to abide by WTO rules.

To date, the U.S. has not complied with a WTO order to withdraw the subsidies, according to the European Commission. In fact, the subsidies may have even increased since the decision, European officials contend.

The support to Boeing consists of $2.6 billion in research and development (R&D) funding from the National Aeronautics and Space Administration (NASA); $1.2 billion in R&D monies from the Department of Defense; $2.2 billion from foreign sales subsidies; $3.1 billion in tax breaks from Washington State, where Boeing is headquartered; and $476 million in subsidies granted by the city of Wichita, Kansas.

European Union Trade Commissioner Karel De Gucht issued a statement that “We had expected that the US would have finally complied in good faith with its international commitments and would have abided by the WTO rulings that clearly condemned US subsidies to Boeing. We are disappointed that this does not seem to be the case. So, the US leaves us with no other choice but to insist on proper compliance before the World Trade Organisation. We are confident that this process will finally lead to a level playing field in the aircraft sector.”

-Noel Brinkerhoff

To Learn More:

Billions for Boeing Flouts Trade Rules, WTO Says (by William Dotinga, Courthouse News Service)

The US Fails to Meet Its Obligations in the WTO Boeing Case (European Commission)

Boeing Received $5 Billion in Illegal Government Subsidies (by Noel Brinkerhoff, AllGov)