WTO reiterates ruling against EU subsidies for Airbus

GENEVA - The World Trade Organization (WTO) confirmed on Tuesday its decision that the European Union (EU) and four of its members - France, Germany, Spain and Britain - failed to comply with an earlier WTO ruling, by maintaining illegal subsidies for aircraft maker Airbus.

WTO's Appellate Body on Tuesday upheld an earlier compliance panel finding that the so-called EU "launch aid" support provided to Airbus was a cause of significant lost sales for competing US aircraft manufacturer Boeing in the twin-aisle and very large aircraft markets.

The Appellate Body also ruled that Airbus paid a below-market interest rate on financing for the development of its latest aircraft, the A350XWB, and that this below-cost financing provided by the French, German, Spanish and British governments conferred a benefit on Airbus and constituted illegal subsidies.

WTO's ruling on EU's failure to comply with the its prior recommendations may now trigger US retaliatory sanctions, whose level would be determined by WTO arbitrators.