In September 2016, after multiple procedural steps and appeals, the last ruling in the United States’ WTO case against Airbus found that the European jet maker had fallen far short of remedying the harm to Boeing from illegal subsidies. The EU immediately appealed. What’s ahead this year, by late spring, is the final decision on that appeal.

If Airbus loses, said Bob Novick, Boeing’s outside counsel on the WTO dispute since 2003 and former general counsel to the U.S. Trade Representative, the U.S. would then immediately request authorization to impose retaliatory sanctions.

Boeing anticipates that the WTO will set the level of sanctions at $10 billion to $15 billion. The U.S. government could then slap punitive tariffs up to that amount on whatever EU goods it selects for maximum political impact.

Yes, Boeing gets tax breaks and so pays less tax on the income from the planes it rolls out each year. But it has to take all the risk and shoulder the multibillion-dollar cost when it develops a new airplane. Airbus gets upfront government loans amounting to billions of dollars to defray the cost in advance — with no repayment necessary if the new airplane project fails.

LockheedBBD wrote:

Interesting new article from the Seattle Times: https://www.seattletimes.com/business/b ... th-europe/

In September 2016, after multiple procedural steps and appeals, the last ruling in the United States’ WTO case against Airbus found that the European jet maker had fallen far short of remedying the harm to Boeing from illegal subsidies. The EU immediately appealed. What’s ahead this year, by late spring, is the final decision on that appeal.

If Airbus loses, said Bob Novick, Boeing’s outside counsel on the WTO dispute since 2003 and former general counsel to the U.S. Trade Representative, the U.S. would then immediately request authorization to impose retaliatory sanctions.

Boeing anticipates that the WTO will set the level of sanctions at $10 billion to $15 billion. The U.S. government could then slap punitive tariffs up to that amount on whatever EU goods it selects for maximum political impact.

Yes, Boeing gets tax breaks and so pays less tax on the income from the planes it rolls out each year. But it has to take all the risk and shoulder the multibillion-dollar cost when it develops a new airplane. Airbus gets upfront government loans amounting to billions of dollars to defray the cost in advance — with no repayment necessary if the new airplane project fails.

moo wrote:

Oh look, a newspaper which gets the basic facts wrong...

For aid issued under 1992 LCA agreement (basically everything borrowed so far, as the bulk of the A350s aid was done under that agreement), Airbus still has to repay the aid regardless of the state of the project - if the project fails, either outright or through poor sales, Airbus has to repay the balance of the launch aid within 17 years.

They also fail to mention that Airbus pays royalties to European governments in perpetuity, with each and every frame delivered - the British government is on record saying that their investment in the A320 series has paid off handsomely several times over. Airbus are still paying those royalties from the 1980s on each and every A319, A320 and A321, both CEO and NEO, delivered. And that goes without saying the same is true for the A330, and yes even the A380 pays royalties on each delivery.

raylee67 wrote:

The ultimate trade war: No more Boeings in EU and no more Airbuses in US. I have got to a point that I would love to see this happen and see those pushing for trade restrictions regret what they wanted.

Dutchy wrote:

raylee67 wrote:

The ultimate trade war: No more Boeings in EU and no more Airbuses in US. I have got to a point that I would love to see this happen and see those pushing for trade restrictions regret what they wanted.

Nobody wins, the ultimate loose-loose.

StTim wrote:

Dutchy wrote:

raylee67 wrote:

The ultimate trade war: No more Boeings in EU and no more Airbuses in US. I have got to a point that I would love to see this happen and see those pushing for trade restrictions regret what they wanted.

Nobody wins, the ultimate loose-loose.

But it seems to be what a lot of people now want to happen. It would be terrible for everyone. I cannot understand the desire to win in the courtrooms. Is Boeing that scared?

StTim wrote:

I cannot understand the desire to win in the courtrooms.

KarelXWB wrote:

StTim wrote:

I cannot understand the desire to win in the courtrooms.

The infinite stupidity of mankind is impossible to understand my friend. History is full with examples.

StTim wrote:

KarelXWB wrote:

StTim wrote:

I cannot understand the desire to win in the courtrooms.

The infinite stupidity of mankind is impossible to understand my friend. History is full with examples.

Sadly very true buddy

StTim wrote:

Is Boeing that scared?

KarelXWB wrote:

StTim wrote:

I cannot understand the desire to win in the courtrooms.

The infinite stupidity of mankind is impossible to understand my friend. History is full with examples.

Yes, Boeing gets tax breaks and so pays less tax on the income from the planes it rolls out each year. But it has to take all the risk and shoulder the multibillion-dollar cost when it develops a new airplane. Airbus gets upfront government loans amounting to billions of dollars to defray the cost in advance — with no repayment necessary if the new airplane project fails.

B777LRF wrote:

Yes, Boeing gets tax breaks and so pays less tax on the income from the planes it rolls out each year. But it has to take all the risk and shoulder the multibillion-dollar cost when it develops a new airplane. Airbus gets upfront government loans amounting to billions of dollars to defray the cost in advance — with no repayment necessary if the new airplane project fails.

1. Boeing 787 and Japan. Boeing deftly shifted financial, R&D and manufacturing costs to 'risk sharing partners' on this program. Had it been an utter failure, MHI and Alenia would have to shoulder their part of the costs all by their lonesome.
2. Airbus have to repay launch aid (up to and including the A350 anyways) regardless of whether the program makes money or not. And if it does make money, they'll have to pay royalties on top.

There's BS and then there's BS so easy to refute, it almost beggars belief. Still, the bloke has kept himself in a 1M+ USD a year job since 2003, can't actually blame him for doing his best to drag it out even further.

TranscendZac wrote:

KarelXWB wrote:

StTim wrote:

I cannot understand the desire to win in the courtrooms.

The infinite stupidity of mankind is impossible to understand my friend. History is full with examples.

Reminds me of Albert Einstein’s famous quote:

“Two things are infinite; the universe and mankind’s stupidity, and I’m not sure about the former.”

What is Boeing trying to accomplish? As an American their antics with the C-Series and this simply look pathetic.

bgm wrote:

How pathetic. Boeing, what the hell is wrong with you these days?

Reminds me about the US3 complaining about the ME3 because they can’t compete.

jupiter2 wrote:

Look at it another way, if you feel you have been wronged by another person or company and all other options have been exhausted, or proven futile, wouldn't you try that last resort, especially when you consider the sums of money involved ? I know people have different views about this topic, which, lets face it, most topics such as this have differing opinions, but IF the WTO is to rule against Airbus in this case, you can hardly blame Boeing.

It's not as though it will be Boeing that brings sanctions or tariffs into play either, that will be the U.S. Government and the relevant trade departments. I would hope that tariffs or sanctions don't happen, it probably wouldn't help either party involved, as no doubt that the current tit for tat would continue and Europe would retaliate in some form.

Still, as someone who tries to be neutral in the fanboyism world of Anet, I could hardly blame Boeing for bringing the original case. The claim against Bombardier on the other, whether technically correct or not, was just petty.

bigjku wrote:

The WTO is an international body where both sides have presented their cases against one another. At some point don’t international trade rules have to be followed? Otherwise why have them?

Nicoeddf wrote:

I feel there is a lot of money spent for the process, attorneys, etc, with very little to gain.
To be perfectly honest, I wonder why Boeing and Airbus even pursue those cases.

At the end of the day, US-European trade is far far larger than commercial Airplanes. Why bother? It seems like a net loss of money for both companies...

zeke wrote:

Nicoeddf wrote:

I feel there is a lot of money spent for the process, attorneys, etc, with very little to gain.
To be perfectly honest, I wonder why Boeing and Airbus even pursue those cases.

At the end of the day, US-European trade is far far larger than commercial Airplanes. Why bother? It seems like a net loss of money for both companies...

The companies themselves cannot go to the WTO, it is the government. Governments are known for wasting money.

bigjku wrote:

Keep in mind that with the C-series the process basically established that Canada broke just about every rule out there but that Boeing specifically didn’t have a product competing against the cs-100.

ExMilitaryEng wrote:

bigjku wrote:

Keep in mind that with the C-series the process basically established that Canada broke just about every rule out there but that Boeing specifically didn’t have a product competing against the cs-100.

That's was discussed ad nauseum.

Remember the word "Hypocrites" that was widely circulating?

There was that $1B Quebec investment for a 49.5 % equity in the CS program. And then what, can you state what else exactly?

Now compare that to the $Bs Boeing received in tax breaks just from Washington state (not repayable, not for equity, just free!).

bigjku wrote:

At some point don’t international trade rules have to be followed? Otherwise why have them?

jupiter2 wrote:

But Boeing still pays taxes in the states where they have tax breaks. The incentive for the states involved is that it keeps thousand of people employed in their states, that keeps tax revenue rolling in from them and the businesses aligned with both Boeing being in the state and servicing the employees employed by Boeing.

jupiter2 wrote:

ExMilitaryEng wrote:

bigjku wrote:

Keep in mind that with the C-series the process basically established that Canada broke just about every rule out there but that Boeing specifically didn’t have a product competing against the cs-100.

That's was discussed ad nauseum.

Remember the word "Hypocrites" that was widely circulating?

There was that $1B Quebec investment for a 49.5 % equity in the CS program. And then what, can you state what else exactly?

Now compare that to the $Bs Boeing received in tax breaks just from Washington state (not repayable, not for equity, just free!).

But Boeing still pays taxes in the states where they have tax breaks. The incentive for the states involved is that it keeps thousand of people employed in their states, that keeps tax revenue rolling in from them and the businesses aligned with both Boeing being in the state and servicing the employees employed by Boeing.

Do you think Airbus picked Alabama for their U.S. assembly plant by accident ? They got the best deal offered by the states bidding for the facility from Alabama, no different to Boeing further investing in Washington state and setting up in South Carolina.

blueflyer wrote:

No one at Boeing really wants sanctions any more than anyone in the US government (at least up until the end of 2016) wants to nuke North Korea. What they want is the threat, and this is what this article is all about, a threat to force negotiations to avoid the ultimate outcome.

Even Boeing's lawyers know the risk with sanctions is there is no predicting how the EU will retaliate. Best case scenario, the EU does to Boeing and the US aerospace industry what the US does to the EU's. Worst case scenario, the EU goes after industries where the damages are far more one-sided, and with more lobbying power than Boeing. I can think of one or two areas the EU could target almost overnight with very little risk of legal repercussions or downside for EU businesses. Either things will de-escalate from there, and Boeing will be the loser, or we will be headed towards a full trade war...

bigjku wrote:

The WTO is an international body where both sides have presented their cases against one another. At some point don’t international trade rules have to be followed? Otherwise why have them?

And of course you are right Boeing gets help in other ways. But if the cases go through this process with international judges and one is ruled to be in violation while another isn’t then doesn’t logic say one side followed the rules and the other didn’t?

B777LRF wrote:

bigjku wrote:

The WTO is an international body where both sides have presented their cases against one another. At some point don’t international trade rules have to be followed? Otherwise why have them?

And of course you are right Boeing gets help in other ways. But if the cases go through this process with international judges and one is ruled to be in violation while another isn’t then doesn’t logic say one side followed the rules and the other didn’t?

You are absolutely right, but I've never claimed Airbus didn't receive subsidies; repayable or low interest it is still their only means of bringing a new product to market with a chance of profitability. But here's the thing, I don't think Boeing are innocent either. And that's what makes this whole farce idiotic; Boeing lodged a complaint first, and might very well win it. And some time after that, it's just as likely Airbus will win their claim. Which is the epitome of a pointless p1ssing match, with the end result everyone ends up wet and smelly.

I do wonder, with a 14-year streak, how much the combined lawyer bill is. Hundred million bucks or so?

bigjku wrote:

Just as a hypothetical what if Boeing wins and Airbus doesn’t? Or what if Boeing wins wirha much bigger number than Airbus? Where does that leave your thoughts?

I am genuinely curious. It’s not a great circumstance all around.

moo wrote:

They also fail to mention that Airbus pays royalties to European governments in perpetuity, with each and every frame delivered - the British government is on record saying that their investment in the A320 series has paid off handsomely several times over. Airbus are still paying those royalties from the 1980s on each and every A319, A320 and A321, both CEO and NEO, delivered. And that goes without saying the same is true for the A330, and yes even the A380 pays royalties on each delivery.

B777LRF wrote:

bigjku wrote:

Just as a hypothetical what if Boeing wins and Airbus doesn’t? Or what if Boeing wins wirha much bigger number than Airbus? Where does that leave your thoughts?

I am genuinely curious. It’s not a great circumstance all around.

It's all a political circus. I recall an intermediate ruling a few years ago, where both the US (Boeing) and EU (Airbus) claimed to have won. In other words, they'll interpret whichever wishy-washy ruling is handed down in a way that suits them best. Then the circus will roll on, making even more lawyers even richer. And that's about all this will ever come to.

Revelation wrote:

It's kind of like saying the original crime is OK as long as proceeds are given to charity, which takes attention away from the original crime that the case is all about.

“The EU would be well-prepared to respond in kind and with much greater force,” said the Airbus legal executive. “The EU will survive that first nuclear strike and will retaliate with megatons to the U.S.’s kilotons.”

In a speech in London last month, Airbus CEO Tom Enders said that under Trump, the U.S. is “no longer fighting for opening markets but to close the U.S. market to … foreign competitors.”

Yet Boeing’s top lawyer, Michael Luttig, said in an interview that the law is about to catch up with Airbus and the European Union (EU).

“Boeing committed itself some 15 years ago … and it has never blinked since,” said Luttig. “Today, we are months away from the imposition of tariffs.”

KarelXWB wrote:

From the same article, it seems EU lawyers are already preparing for a trade war:

“The EU would be well-prepared to respond in kind and with much greater force,” said the Airbus legal executive. “The EU will survive that first nuclear strike and will retaliate with megatons to the U.S.’s kilotons.”

In a speech in London last month, Airbus CEO Tom Enders said that under Trump, the U.S. is “no longer fighting for opening markets but to close the U.S. market to … foreign competitors.”

Can't believe what I'm reading here. And clearly Boeing won't give up:

Yet Boeing’s top lawyer, Michael Luttig, said in an interview that the law is about to catch up with Airbus and the European Union (EU).

“Boeing committed itself some 15 years ago … and it has never blinked since,” said Luttig. “Today, we are months away from the imposition of tariffs.”

Strong language, as usual.

jubguy3 wrote:

Why compete when you can litigate your way to the top? Boeing is playing a risky game here.

SC430 wrote:

Let's see.... Boeing made it's case before the WTO fifteen years ago. If the case had no merit it would not have been decided in Boeing's favor witch led to appeals by Airbus. The appeals process is now winding down and Boeing and Airbus will have to live with the findings. Unless many here feel the WTO is not a fair body, what's your bitch?

Boeing has to live with the recent ruling on the C series - Airbus will have to live with the WTO ruling should it not go in their favor. Stop your whining!!