Subsidies on Large Civil Aircraft

Dispute Brought by the United States Against the European Union: Subsidies on Large Civil Aircraft (ds316) in 2011

United States views on international law (based on the document “Digest of U.S. Practice in International Law”): (2) Dispute brought by the United States against the European Union: Subsidies on large civil aircraft (DS316) In this dispute dating back to 2004, the United States challenged subsidies provided to Airbus by the European Union, France, Germany, Spain, and the United Kingdom. For background, see this world legal encyclopedia in relation with the year 2004 at 603-4, World Encyclopedia of Law 2005 at 622, and World Encyclopedia of Law 2010 at 480-81. On June 1, 2011, the WTO's Dispute Settlement Body (“DSB”) adopted the report of the Appellate Body, which affirmed the panel's main findings in favor of the United States, with some modifications. Excerpts below from the 2011 Annual Report at 72 discuss the Appellate Body's report and the EU's compliance with the DSB rulings.

The Appellate Body affirmed the panel's central findings that European government launch aid had been used to support the creation of every model of large civil aircraft produced by Airbus. The Appellate Body also confirmed that launch aid and other challenged subsidies to Airbus have directly resulted in Boeing losing sales involving purchases of Airbus aircraft by easyJet, Air Berlin, Czech Airlines, Air Asia, Iberia, South African Airways, Thai Airways International, Singapore Airlines, Emirates Airlines, and Qantas – and lost market share, with Airbus gaining market share in the European Union and in third country markets, including China and South Korea at the expense of Boeing. The Appellate Body also found that the panel applied the wrong standard for evaluating whether subsidies are export subsidies, and that the panel record did not have enough information to allow application of the correct standard.

On December 1, 2011, the EU provided a notification in which it claimed to have complied with the DSB recommendations and rulings. On December 9, 2011, the United States requested consultations regarding the notification and also requested authorization from the DSB to impose countermeasures.

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See Also

• Trade
• Commercial Relations
• Investment
• Transportation
• World Trade Organization
• Dispute Settlement
• International Disputes
• United States