chrisrad
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WTO Says Boeing Got Illegal $5bn Subsidies

Tue Mar 13, 2012 12:02 am

Haven't seen this posted yet on the forum

"The World Trade Organization has ruled that US planemaker Boeing received $US5.3 billion ($A5.04 billion) in illegal government subsidies over a quarter of a century, far less than what arch-rival Airbus received according to an earlier finding"

http://au.finance.yahoo.com/news/wto...21lBHB0A3NlY3Rpb25zBHRlc3QD;_ylv=3
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Tugger
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RE: WTO Says Boeing Got Illegal $5bn Subsidies

Tue Mar 13, 2012 12:18 am

The sad but funny thing is the trumpeting in the article by each sides supporters is nearly identical to the "talking at cross purposes" that we see here on A.net on this topic (and will see in this thread). Each side only puts forth and supports what reinforces it's "favorite".

I guess the one good thing is that now that this is established, who got what and how much, the two sides can hopefully now establish an equalized and agreed to method going forward on how to support their aerospace industries. Of course it will take many years to do so.

I am also betting these decisions will be used to target any other nations/regions support of their commercial aerospace sectors.

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mercure1
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RE: WTO Says Boeing Got Illegal $5bn Subsidies

Tue Mar 13, 2012 12:27 am

Not that it will put things to rest, however the point is that Boeing has benefited and been subsidized by the US government, and on its own commercial merits would would have incurred far higher financial cost in doing business.

So at the day, hopefully Boeing atleast can step back from playing its "I'm innocent" card, as its has been shown to have benefited from illegal aid (albeit not to as large amount as EADS).
 
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kanban
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RE: WTO Says Boeing Got Illegal $5bn Subsidies

Tue Mar 13, 2012 12:29 am

Well one thing I agree with is the tax breaks Washington State has given Boeing every time they introduce a new model are inappropriate..Now sales tax exclusion costs us all. The state is broke now and although this won't balance the books, it will help. On the other side I disagree that doing paid research for NASA is a subsidy.. NASA pays and gets product for the payment. Export subsidies are tricky... but it seems only those around commercial a/c are illegal... next someone will claim that US foreign aid that is used to buy US products is illegal.. but European foreign aid used to buy European products isn't.
 
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RE: WTO Says Boeing Got Illegal $5bn Subsidies

Tue Mar 13, 2012 12:30 am

Fuller stories make it abundently clear that Airbus illegal subsidies were 3-4 times larger. That has been clear for the last year or so. Why not reporte with a little accuracy?
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PM
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RE: WTO Says Boeing Got Illegal $5bn Subsidies

Tue Mar 13, 2012 12:32 am

ATWonline's report today starts pretty unambiguously.

http://atwonline.com/international-a...s-ruling-airbus-boeing-both-claim-

"The World Trade Organization (WTO) on Monday upheld a ruling that Boeing received “at least” $5.3 billion of unfair subsidies between 1989 and 2006 and agreed with Airbus that the effect of the financial support is larger than their face value in light of their “particularly pervasive” nature."

Quoting mercure1 (Reply 2):
hopefully Boeing atleast can step back from playing its "I'm innocent" card

   Neither side is innocent but I think only one claims to be...  
 
PPVRA
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RE: WTO Says Boeing Got Illegal $5bn Subsidies

Tue Mar 13, 2012 12:38 am

It's bizarre that tax breaks are somehow subsidies, but sweetheart loans are not. And both A & B benefit in at least one way from sweetheart loans through export programs. Both US and EU airlines have complained about these export loans that benefit foreign airlines like Emirates, Qatar, Singapore, etc.

Maybe there is some sort of arrangement that makes these tax breaks subsidy-like, but unless you look closer, who knows.
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ikramerica
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RE: WTO Says Boeing Got Illegal $5bn Subsidies

Tue Mar 13, 2012 12:40 am

Why not argue that universal healthcare is a subsidy too? Or that corporate tax rates that aren't the same in one country v another result in a subsidy? Ultimately there is no such thing as a level playing field in international trade. Why the charade from the WTO that it's even possible?
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RE: WTO Says Boeing Got Illegal $5bn Subsidies

Tue Mar 13, 2012 1:30 am

Quoting ikramerica (Reply 7):
Ultimately there is no such thing as a level playing field in international trade.

  

The disagreement between both governments and OEMs has been ridiculous from the start, IMO, and in the end, only the lawyers (public and private) benefit as they rack up those billable hours.

The EU decries the subsidies Boeing gets from Washington State to land the 787 FAL, but they keep their mouths firmly shut on the subsidies Alabama gave Airbus to land an A330 FAL in Mobile, to say nothing of the subsidies they gave Mercedes for their factory in Tuscaloosa (to name just two of many).

And the US bitches about subsidies given to Airbus, even though a significant amount of kit that goes into an Airbus plane comes from US factories that create US jobs and pay US taxes. And I am sure with little work folks can bring up areas where the US position on commercial aviation is hypocritically ignored in other fields.
 
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RE: WTO Says Boeing Got Illegal $5bn Subsidies

Tue Mar 13, 2012 8:39 am

EADS chief financial officer Hans-Peter Ring said in Paris last week that the government loans were proving more expensive than market-sourced finance, at least at the moment.
 
n1786b
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RE: WTO Says Boeing Got Illegal $5bn Subsidies

Tue Mar 13, 2012 9:05 am

Quoting RubberJungle (Reply 9):
EADS chief financial officer Hans-Peter Ring said in Paris last week that the government loans were proving more expensive than market-sourced finance, at least at the moment.

A nice impartial perspective - if that were the case, why does he have his hands out for the A350XWB?

On a side note, I also think it is interesting on how tax policy can be judged "illegal" by the WTO. Now wouldn't it be nice to see if the WTO have a look at how they exonerate VAT from export sales? Not to mention the legal and fiscal framework of the public-private Aerospace clusters.

And how do the NASA grants differ from all the EU framework programs and the ONERA and DLR grants? Enquiring minds want to know... What a mess...

[Edited 2012-03-13 02:19:57]
 
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RE: WTO Says Boeing Got Illegal $5bn Subsidies

Tue Mar 13, 2012 9:08 am

Quoting frmrCapCadet (Reply 4):
Fuller stories make it abundently clear that Airbus illegal subsidies were 3-4 times larger.

This is not true. The benefit for Airbus was not the full amount of paid RLI's. Only the difference between the interest rate they got (government borrowing rate plus 0.25%) and the interest rate on the free market was charged as subsidy. And this is far less than the 15bn's as claimed wrongly by the US side.
Please correct me if I am wrong.
 
SuperCaravelle
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RE: WTO Says Boeing Got Illegal $5bn Subsidies

Tue Mar 13, 2012 10:25 am

Boeing and Airbus will not push each other out of the market and they both know it. The government subsidies won't change that for either one.
My main gripe is that with each subsidy, either for A or B, it becomes more difficult for new entrants to enter the market successfully. Something that is, in my opinion, highly needed and at the same time almost impossible.
 
vv701
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RE: WTO Says Boeing Got Illegal $5bn Subsidies

Tue Mar 13, 2012 10:45 am

Quoting frmrCapCadet (Reply 4):
Why not reporte with a little accuracy?
Quoting PM (Reply 5):
ATWonline's report today starts pretty unambiguously

The BBC (a member of the European media) reports it as it is:

'[The WTO] said [Boeing], which is the arch-rival of Europe's Airbus, was given $5bn (£3.2bn, 3.8bn euros) in illegal government subsidies.

'That is much less than the $18bn an earlier ruling found Airbus had received from the EU.'

It goes on to report:

' US Trade Representative Ron Kirk, called the ruling "a tremendous victory for American manufacturers and workers".'

Complete report at:

http://www.bbc.co.uk/news/business-17345903
 
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RE: WTO Says Boeing Got Illegal $5bn Subsidies

Tue Mar 13, 2012 11:40 am

Quoting frmrCapCadet (Reply 4):
Fuller stories make it abundently clear that Airbus illegal subsidies were 3-4 times larger. That has been clear for the last year or so. Why not reporte with a little accuracy?

That’s just plain wrong, although Airbus has received more cash it was in the form of loans that have to be repaid with interest and royalty payments. Therefore only the difference between market interest rates and those charged by the government should be considered a subsidy.

As for who is the real winner in this case; it has to be the lawyers really. Boeing has been left with a fair bit of egg on its face given how it instigated the case in the first place only to have its own illegal subsidy’s found out. And Airbus has been found to be receiving preferential interest rates… So they both lose really.
 
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RE: WTO Says Boeing Got Illegal $5bn Subsidies

Tue Mar 13, 2012 12:16 pm

Quoting frmrCapCadet (Reply 4):
Fuller stories make it abundently clear that Airbus illegal subsidies were 3-4 times larger.

So now we're playing "You're more guilty then me?" Both are guilty of infringing WTO rules. You're either guilty or innocent, you cannot be more guilty or less guilty.

Quoting n1786b (Reply 10):
why does he have his hands out for the A350XWB?

What government funding has Airbus applied for in respect of the A350?

Quoting rheinwaldner (Reply 11):
And this is far less than the 15bn's as claimed wrongly by the US side.
Please correct me if I am wrong.

I believe you're correct. Of course that makes Boeing's $5b+ of illegal subsidies far more significant than they would have us believe.

Quoting VV701 (Reply 13):
' US Trade Representative Ron Kirk, called the ruling "a tremendous victory for American manufacturers and workers".'

And they're all at it!   

At the end of the day, this will go down as a huge waste of time, money and energy for all involved, except the lawyer$.
http://www.businessweek.com/news/201...egal-boeing-aid-raises-harm-amount

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RE: WTO Says Boeing Got Illegal $5bn Subsidies

Tue Mar 13, 2012 12:23 pm

Some of the comments at Airbus were off-putting to say the least. Calling the 787 Dreamliner the "7aid7 Subsidyliner"? really?
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RE: WTO Says Boeing Got Illegal $5bn Subsidies

Tue Mar 13, 2012 1:12 pm

Quoting scbriml (Reply 15):
So now we're playing "You're more guilty then me?" Both are guilty of infringing WTO rules. You're either guilty or innocent, you cannot be more guilty or less guilty.

Interesting, given that this board had numerous scorecards of numbers of violations claimed and number of claims upheld for each side as events unfurled.
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astuteman
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RE: WTO Says Boeing Got Illegal $5bn Subsidies

Tue Mar 13, 2012 1:14 pm

Quoting frmrCapCadet (Reply 4):
Fuller stories make it abundently clear that Airbus illegal subsidies were 3-4 times larger. That has been clear for the last year or so. Why not reporte with a little accuracy?

Indeed. Why not report with a little accuracy?

From the article in the OP..

Quote:
The World Trade Organization has ruled that US planemaker Boeing received $US5.3 billion ($A5.04 billion) in ILLEGAL government subsidies over a quarter of a century

my bolding

Quote:
In May last year, a WTO panel ruled on a US complaint that European governments provided to Airbus, based in Toulouse, France, with $US18 billion in subsidies, THOUGH NOT ALL WERE FOUND TO BE ILLEGAL UNDER INTERNATIONAL RULES

My bolding again.

So.
Do you have a figure for the LEGAL subsidies Boeing have received, so that we can add it to the $US5.3Bn that has been ruled ILLEGAL by the WTO, and compare THAT to the $US18Bn said to have been received by Airbus, for the sake of "accuracy"?   

I will suggest that attempting to rule on whether one side benefitted more than the other in this debate is about as "unsafe" a judgement as it is possible to make?

We, collectively, should have learned by now IMO

Still. I believe the bonus paid by the lawyers union to Harry Stonecipher for raising the issue in the first place was well earned  

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vv701
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RE: WTO Says Boeing Got Illegal $5bn Subsidies

Tue Mar 13, 2012 1:16 pm

Quoting scbriml (Reply 15):
So now we're playing "You're more guilty then me?" Both are guilty of infringing WTO rules. You're either guilty or innocent, you cannot be more guilty or less guilty.

Perhaps you could therefore explain why courts vary the punishment of those found guilty of specific crimes depending on the measurable or perceived severity of their crime? Do you think that they mistakenly believe that some are more guilty than others?

As a taxpayer providing my and my family's share of any UK or EU illegal subsidy my bank account certainly notices the difference between a smaller or larger illegal subsidy.

Quoting scbriml (Reply 15):
And they're all at it!

Of course. From the same link:

'EU Trade Commissioner Karel De Guch called Monday's ruling vindication of the "EU's long-held claims that Boeing has received massive US government handouts in the past and continues to do so today".'

Everyone's a winner even though both have been found guilty. And -, whether we are American or European, its our money.

As a European tax payer I have made a contribution to what the WTO has identified as an $18 billion subsidy. This is equivalent to almost £23 for every man, woman and child resident in the EU. This is money I would far rather have seen spent on education or health care than subsidising the world's airlines, the end beneficiaries of the subsidy. In the UK alone - assuming the per capita contribution from poorer EU members matches the UK's, which it does not - the total subsiidy amounts to over £1.4 billion.
 
astuteman
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RE: WTO Says Boeing Got Illegal $5bn Subsidies

Tue Mar 13, 2012 3:24 pm

Quoting VV701 (Reply 19):
As a European tax payer I have made a contribution to what the WTO has identified as an $18 billion subsidy. This is equivalent to almost £23 for every man, woman and child resident in the EU. This is money I would far rather have seen spent on education or health care than subsidising the world's airlines, the end beneficiaries of the subsidy. In the UK alone - assuming the per capita contribution from poorer EU members matches the UK's, which it does not - the total subsiidy amounts to over £1.4 billion.

I'd be a bit careful with this argument......

The $18Bn in "subsidies" includes Repayable Launch Investment, which as the name suggests, gest repaid.

The WTO ruling in respect of this (as far as I can tell) was that
a) it was a legal mechanism
b) in some cases it had been applied in an "illegal" manner - i.e. on interest rate terms or repayment terms, that strayed outside the "agreed" legal framework.

Airbus have been asked to put these loans back onto a legal footing

I suspect that overall, European taxpayers tax burdens have benefitted far more from the economic wealth created by Airbus, than the tax drag caused by the RLI has hurt them.

Hard to prove either way....

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EPA001
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RE: WTO Says Boeing Got Illegal $5bn Subsidies

Tue Mar 13, 2012 3:26 pm

Quoting n1786b (Reply 10):
Quoting RubberJungle (Reply 9):
EADS chief financial officer Hans-Peter Ring said in Paris last week that the government loans were proving more expensive than market-sourced finance, at least at the moment.

A nice impartial perspective - if that were the case, why does he have his hands out for the A350XWB?


Hans-Peter Ring has stated that RLI (Repayable Loan Initiative money) is still attractive to Airbus due to better risk spreading conditions. That is why they still take the more expensive RLI loans.

See also: http://www.flightglobal.com/blogs/fl...irbus-launch-aid-no-great-bar.html

Quoting Daysleeper (Reply 14):
Therefore only the difference between market interest rates and those charged by the government should be considered a subsidy.


   Which is the big difference in the two cases imho.

Quoting astuteman (Reply 18):
I will suggest that attempting to rule on whether one side benefited more than the other in this debate is about as "unsafe" a judgement as it is possible to make?


   The WTO-cases are called the best pension scheme for lawyers in the 21st century on both sides of the pond.

Quoting VV701 (Reply 19):
As a European tax payer I have made a contribution to what the WTO has identified as an $18 billion subsidy.


The financial advantage which was ruled illegal by thw WTO was $ 18 Billion. It was the difference in interest rates on the $ 18 Billion to be paid which was declared illegal. That surmounts to an amount which is almost completely negligible compared to the $ 18 Billion amount. Airbus have stated that they have taken the actions necessary to comply with the WTO ruling to their advantage. They must have even out the financial imbalance which was not a real big amount of money.

It is going to be interesting to see if Boeing will pay back $ 5.3 Billion in cash.  . And also the interest rate advantage they enjoyed (for loans they never had to take because of the subsidy) should be paid back as well imho.  .

[Edited 2012-03-13 08:29:05]
 
PPVRA
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RE: WTO Says Boeing Got Illegal $5bn Subsidies

Tue Mar 13, 2012 3:56 pm

Quoting astuteman (Reply 23):
The $18Bn in "subsidies" includes Repayable Launch Investment, which as the name suggests, gest repaid.

As mentioned above, sweetheart loans are still subsidies. And we should not diminish this to mere "interest rates" - had Airbus not been able to find alternative investments, some of their programs would never even have gotten off the ground. Not a slight impact in the least. Not that I believe they couldn't have found it, IMO it was likely a business decision to go with the lower interest loans, which probably has other benefits you and I would not give them in case they got into trouble.

Quoting astuteman (Reply 23):
I suspect that overall, European taxpayers tax burdens have benefitted far more from the economic wealth created by Airbus, than the tax drag caused by the RLI has hurt them.

Hard to prove either way....

Since a lot of this money is probably related to the A380, I'd say this is - thus far - still very much in the negative. Going forward, however, hopefully this will change.
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fpetrutiu
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RE: WTO Says Boeing Got Illegal $5bn Subsidies

Tue Mar 13, 2012 4:49 pm

http://money.cnn.com/2012/03/12/mark...s-wto/index.htm?cnn=yes&hpt=hp_bn1

According to the WTO, Boeing got $6b compared to $18b for Airbus. WTO futher agreed that Boeing was not at a level playing field and that Airbus had the overall advantage.
 
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par13del
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RE: WTO Says Boeing Got Illegal $5bn Subsidies

Tue Mar 13, 2012 5:01 pm

Quoting astuteman (Reply 18):
Indeed. Why not report with a little accuracy?

From the article in the OP..

Quote:
The World Trade Organization has ruled that US planemaker Boeing received $US5.3 billion ($A5.04 billion) in ILLEGAL government subsidies over a quarter of a century
Quoting astuteman (Reply 18):
my bolding

Quote:
In May last year, a WTO panel ruled on a US complaint that European governments provided to Airbus, based in Toulouse, France, with $US18 billion in subsidies, THOUGH NOT ALL WERE FOUND TO BE ILLEGAL UNDER INTERNATIONAL RULES

My question would be how is the WTO able to definitively state a figure that Boeing received as being illegal but when it comes to the Airbus ruling they state a figure then add the caveat that not all were found to be illegal, it could be $5.00 or $1,000.00, guess I have to go read the entire document.

As some have said illegal is illegal, and if you can state that some is legal and some illegal one should be able to identiy the figure with more accuracy than saying though not all.
It essentially provides more fodder for litigants professional and amateur on and off this site who want to claim that the WTO ruling is definitive and case closed.
 
Daysleeper
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RE: WTO Says Boeing Got Illegal $5bn Subsidies

Tue Mar 13, 2012 5:40 pm

Quoting par13del (Reply 31):
My question would be how is the WTO able to definitively state a figure that Boeing received as being illegal but when it comes to the Airbus ruling they state a figure then add the caveat that not all were found to be illegal, it could be $5.00 or $1,000.00, guess I have to go read the entire document.

It’s really not that difficult to understand, Airbus received preferential interest rates on loans that were ruled illegal therefore they are only responsible for the difference in interest from the market rate.

I still maintain that neither side has “won” in this, but to put things in perspective if Airbus were given an interest rate 10% better than what they would have received from the market, then they would have effectively been subsidised to the tune of 1.8 billion which they have already re-paid. Boeing on the other hand have received over 5 billion that they have not as yet repaid.

Quoting neutronstar73 (Reply 26):
Even more significant, the two men said, were the conclusions about the impact of the subsidies. The new ruling concluded that the U.S. subsidies cost Airbus the sale of 118 aircraft, but the previous ruling on EU subsidies found that they cost Boeing 342 aircraft sales, the USTR officials said.

Wasn’t it Boeing who were prosecuted, and fined for corruption? In fact didn’t one of their senior managers end up in prison over corruption charges? I somehow doubt those figures will reflect the orders Boeing has taken from Airbus with bribes.
 
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usxguy
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RE: WTO Says Boeing Got Illegal $5bn Subsidies

Tue Mar 13, 2012 5:53 pm

I want to know how is this "illegal" ?? Where is the Constitution for Earth? What makes the WTO the "end-all" law?

Both Airbus and Boeing receive 'nationalism' assistance/protection from their respective countries.
xx
 
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par13del
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RE: WTO Says Boeing Got Illegal $5bn Subsidies

Tue Mar 13, 2012 6:02 pm

Quoting Daysleeper (Reply 26):
if Airbus were given an interest rate 10% better than what they would have received from the market,

The "if" is my issue, the quoted text allows the use of if on one side

Quoting Daysleeper (Reply 26):
Boeing on the other hand have received over 5 billion that they have not as yet repaid.

Definately no if here.

Quoting Daysleeper (Reply 26):
I still maintain that neither side has “won” in this,

Which makes one wonder if those who made the ruling are normal humans like those of us on this site or they just have a cruel sense of humour, sure makes things clear as mud  
 
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EPA001
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RE: WTO Says Boeing Got Illegal $5bn Subsidies

Tue Mar 13, 2012 6:05 pm

Since a post of my got deleted for housekeeping purposes only, I will repost this interesting part which states that Airbus have complied with the WTO ruling in the case the US started against the EU:

http://www.flightglobal.com/news/art...-of-wto-compliance-actions-365525/

The summary: Airbus and the European Union said on 1 December that they have complied with World Trade Organization (WTO) rulings banning unfair subsidies and called upon Boeing and the US government to take similar steps early next year and Airbus described the actions as "limited changes in European policies and practices".

And they did not pay $ 18 Billion back. And the WTO has accepted this.  .

So Airbus have complied, and any payment of that magnitude would have made big news and would have drastically influenced the Financial figures EADS has to report as a publicly listed company. The numbers did not even drew any attention in the quarterly financial statement because the amount was negligible. Also the payment of such a huge amount would have drawn considerable media attention. Something we did not see.  .

Now I doubt if the same will go for the Boeing payback which is $ 5.3 Billion in solid money.  .
 
TheCol
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RE: WTO Says Boeing Got Illegal $5bn Subsidies

Tue Mar 13, 2012 6:28 pm

It's amazing how much money is wasted over this kangaroo court. Cue the cargo bay...

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Stitch
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RE: WTO Says Boeing Got Illegal $5bn Subsidies

Tue Mar 13, 2012 6:51 pm

Now that both sides have their "win" and proved how "bad" the other side was, hopefully they'll work on a new agreement and then STFU.
 
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zeke
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RE: WTO Says Boeing Got Illegal $5bn Subsidies

Tue Mar 13, 2012 7:34 pm

Quoting kanban (Reply 3):

This is actually the second time the WTO has ruled against the US/Boing practices. The fist one was basically money laundering as they were not paying taxes on exports. Took the US government around 6 years to comply with the first WTO ruling.

I'd not have an issue with Boeing doing paid research for the government, however I do have an issue with them not publishing all the research done, all we see are generic research reports and technical publications, often not enough information to verify the research. I also have a problem with the being assigned patents while conducting this research, that IP should be owned by the government, and any company should bible to licence Italy market rates.
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RE: WTO Says Boeing Got Illegal $5bn Subsidies

Tue Mar 13, 2012 7:37 pm

Quoting Stitch (Reply 30):
Now that both sides have their "win" and proved how "bad" the other side was, hopefully they'll work on a new agreement and then STFU.

I like your optimism...  

But, if the talk on this thread is any indicative... We aren't there yet 
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cmf
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RE: WTO Says Boeing Got Illegal $5bn Subsidies

Tue Mar 13, 2012 7:42 pm

I will not comment on the two cases as it seems there are more versions to each sentence than people reading them. Just how much the rulings have changed during appeals is an indication how uncertain everything is.

Quoting usxguy (Reply 26):
I want to know how is this "illegal" ?? Where is the Constitution for Earth? What makes the WTO the "end-all" law?

When nations agree to be bound by WTO rulings. Though you may think some nations think they are only bound to follow ruling for them and can ignore those against them.
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RE: WTO Says Boeing Got Illegal $5bn Subsidies

Tue Mar 13, 2012 7:51 pm

Quoting VV701 (Reply 19):
Perhaps you could therefore explain why courts vary the punishment of those found guilty of specific crimes depending on the measurable or perceived severity of their crime? Do you think that they mistakenly believe that some are more guilty than others?

Guilt and punishment are two different beasts. You're either guilty or innocent - it's a binary state, like pregnancy.

Quoting VV701 (Reply 19):
As a taxpayer providing my and my family's share of any UK or EU illegal subsidy my bank account certainly notices the difference between a smaller or larger illegal subsidy.

Even if Airbus received nothing, your bank balance would be no different. The money would have been spent on something else.

Quoting fpetrutiu (Reply 23):
According to the WTO, Boeing got $6b compared to $18b for Airbus. WTO futher agreed that Boeing was not at a level playing field and that Airbus had the overall advantage.

No, that's according to CNN's interpretation of what the US Trade Representative told them. There are so many errors in that article that it really should be ignored.

Quoting usxguy (Reply 26):
I want to know how is this "illegal" ?? Where is the Constitution for Earth? What makes the WTO the "end-all" law?

Well, when you sign-up to a trade policing organisation and agree to the rules, they would be the ones to tell you you've broken the rules, no?

Quoting Stitch (Reply 30):
Now that both sides have their "win" and proved how "bad" the other side was, hopefully they'll work on a new agreement and then STFU.

If only. I have no doubt that both sides will exhaust another couple of rounds of appeals, lining the pockets of the lawyers yet again, before they finally agree to sit round a table and try and thrash out a workable agreement.
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astuteman
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RE: WTO Says Boeing Got Illegal $5bn Subsidies

Tue Mar 13, 2012 8:51 pm

Quoting PPVRA (Reply 22):
And we should not diminish this to mere "interest rates" -

Shouldn't we?
It is clearly eveident that some portion at least is exactly that.
Maybe not all, but some.
Dismissing "mere interest rates" as irrelevant would be equally disingenous, I would have thought

Quoting PPVRA (Reply 22):
Since a lot of this money is probably related to the A380, I'd say this is - thus far - still very much in the negative.

Data provided by the UK government suggests that in this country at least, RLI repayments made to date equalled monies advanced, including for the A380.
That's before we get into the question of how much tax revenue has been provided by the huge workforce associated not just with the OEM, but with the suppiers who it supports.

So I suggest that your conclusion may be somewhat flawed

Quoting par13del (Reply 24):
It essentially provides more fodder for litigants professional and amateur on and off this site who want to claim that the WTO ruling is definitive and case closed.

  
To be honest there's so much grey out there that, as I said earlier, only an idiot would try to create a definitive argument one way or another.

Although this is clearly not going to stop opinionated bigotry on either side, of course  

The thing that intrigues me is that the WTO as reported appears to make no reference whatsoever to what is (for me at least) the biggest prompt for European Government support for Airbus.
(And the EU DOES make reference to this)
And that is the generous treatment (by EU standards) afforded by the US government to US defence contractors, of which Boeing is one.

I won't drag out the whole list of GAO reports (most of which I sadly have), but the overruns on aerospace defence programmes that have been absorbed by the US taxpayer in order to afford US contractors 10% profit margins on their contracts beggars belief, and dwarfs every number that has been thrown around on this thread.

The thing is, as a defence contractor myself, I respect the US right to protect its national interest in this way.
In fact, the classic US poster response is (rightly) "Well if the EU spent their share..."

And yes, I'm sure someone will bring to the table the $4.5Bn relief recently afforded to EADS for the A400M.
After I got to over $200Bn similarly advanced to US aerospace contractors in the last 25 years or so (admittedly across a whole raft of military aircraft, and not specifically Boeing), I gave up counting.

I can't see a way of calling it illegal - it's a "national interest" thing. And one I support, for what its worth.

All I will say is that close to 50% of Boeing's profits and cash generation comme from defence programmes, and has for a long time.
We shouldn't pretend that in some way that doesn't distort the playing field.

rgds
 
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Stitch
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RE: WTO Says Boeing Got Illegal $5bn Subsidies

Tue Mar 13, 2012 9:11 pm

Quoting astuteman (Reply 35):
And that is the generous treatment (by EU standards) afforded by the US government to US defence contractors, of which Boeing is one.

Could explain why a number of European defense contractors have become so active in bidding for US military contracts the past couple of decades.

[Edited 2012-03-13 14:15:34]
 
ikramerica
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RE: WTO Says Boeing Got Illegal $5bn Subsidies

Tue Mar 13, 2012 9:16 pm

Quoting Stitch (Reply 36):
Could explain why a number of European defense contractors have become so active in bidding for US military contracts over the past decade-plus.

And of course the problem with his assertion is that if the military subsidies were keeping the commercial side afloat, then Boeing would drop the commercial side to increase profits for the shareholders. Otherwise, if there was value in propping up a commercial program with a military one, we'd see more companies than Boeing doing so.
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Stitch
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RE: WTO Says Boeing Got Illegal $5bn Subsidies

Tue Mar 13, 2012 9:45 pm

Quoting ikramerica (Reply 37):
And of course the problem with his assertion is that if the military subsidies were keeping the commercial side afloat, then Boeing would drop the commercial side to increase profits for the shareholders. Otherwise, if there was value in propping up a commercial program with a military one, we'd see more companies than Boeing doing so.


And while much smaller than the US defense industry, Europe's is not exactly tiny.

British, French and Spanish governments at the State/Region, County and Municipal levels granted Airbus Commercial and Airbus Military many of the same subsidies just ruled illegal, but they're not considered because they weren't part of the original complaint.

And if NASA research is illegal by Boeing Commercial, is not that same research illegal when used by Airbus Commercial? And what of all the research European governments generate? If that had been part of the original complaint and had been found illegal when used by Airbus, one would think it would also have been found illegal when used by Boeing.

Boeing and the US started it, so they should carry the most shame, but I find the actions of both governments and OEMs farcical.

[Edited 2012-03-13 14:49:04]
 
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scbriml
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RE: WTO Says Boeing Got Illegal $5bn Subsidies

Tue Mar 13, 2012 9:48 pm

Quoting astuteman (Reply 35):
And that is the generous treatment (by EU standards) afforded by the US government to US defence contractors, of which Boeing is one.

I didn't think WTO rules applied to military programs anyway?
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Stitch
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RE: WTO Says Boeing Got Illegal $5bn Subsidies

Tue Mar 13, 2012 9:52 pm

Quoting scbriml (Reply 39):
I didn't think WTO rules applied to military programs anyway?

Might be why they focused mainly on the tax breaks given to Boeing for the 787 and discounted the military stuff Airbus was using as part of their $19 billion claim.

Course, with how long Boeing is taking to deliver those planes, that subsidy won't be fully realized until next century.   
 
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par13del
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RE: WTO Says Boeing Got Illegal $5bn Subsidies

Wed Mar 14, 2012 12:32 am

Quoting astuteman (Reply 35):
And that is the generous treatment (by EU standards) afforded by the US government to US defence contractors, of which Boeing is one.
Quoting astuteman (Reply 35):
The thing is, as a defence contractor myself, I respect the US right to protect its national interest in this way.
In fact, the classic US poster response is (rightly) "Well if the EU spent their share..."
Quoting Stitch (Reply 36):
Could explain why a number of European defense contractors have become so active in bidding for US military contracts the past couple of decades.

One of the reasons why such logical responses were welcomed in the tanker threads.

Off topic for a bit but the so called dividend from the end of the cold war was not realized in the USA, at least not from the industrial side, the war on drugs provided an alternative. Repuublicans as we know are pro-military spending, when you consider the cost of an F22 for example, the actual military suport - pilot and ground crew - takes years to equal the billions spent in the civilian marker bringing the a/c to fruition.

At the end of the days its all about jobs, revenue and taxes, how is the rest of the story.
 
neutronstar73
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RE: WTO Says Boeing Got Illegal $5bn Subsidies

Wed Mar 14, 2012 2:30 am

Quoting Stitch (Reply 38):
And if NASA research is illegal by Boeing Commercial, is not that same research illegal when used by Airbus Commercial? And what of all the research European governments generate? If that had been part of the original complaint and had been found illegal when used by Airbus, one would think it would also have been found illegal when used by Boeing.

And that's a KEY point. If Airbus uses NASA technology (funded by Americans and used at no expense to them) then they too have recieved an "illegal" benefit. That part of the WTO's ruling is quite ridiculous.

And lots not start with their "Boeing gets defense subsidies" because if that is the case, then Airbus receives the same thing through EADS, not too mention how both Boeing and Airbus gorge themselves at the government trough whenever and however they can get it. And the whole "Boeing got 2.2 billion in Foreign Sales Subsidies" is quite laughable on its face...but the legal analysis is too long to explain why.

I'll repost this just for comparison's sake: courtesy of Aviation Week:

http://www.aviationweek.com/aw/gener...e%20Subsidy%20Dispute&channel=comm

Even more significant, the two men said, were the conclusions about the impact of the subsidies. The new ruling concluded that the U.S. subsidies cost Airbus the sale of 118 aircraft, but the previous ruling on EU subsidies found that they cost Boeing 342 aircraft sales, the USTR officials said. “The European Union claimed that the nature and impact of these subsidies was essentially the same: they gave some, we gave some, it all comes out in the wash,” Reif says. “Yet again, the appellate body decisively rejected that view.”

A net advantage of 224 aircraft for Airbus. I don't see how that is insignificant, when on this board, people go nuts over a 20 aircraft order.
 
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EPA001
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RE: WTO Says Boeing Got Illegal $5bn Subsidies

Wed Mar 14, 2012 5:26 am

The aviaton week article is an incorrect interpretation of the facts. Airbus have complied with the WTO ruling as I earlier posted and they did not pay a huge amount of money to do so. In the Boeing case a lot more money is at stake though.  
 
astuteman
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RE: WTO Says Boeing Got Illegal $5bn Subsidies

Wed Mar 14, 2012 5:35 am

Quoting ikramerica (Reply 37):
And of course the problem with his assertion is that if the military subsidies were keeping the commercial side afloat, then Boeing would drop the commercial side to increase profits for the shareholders

It's not about being able to "keep the commercial side afloat". It's about being able to leverage advantage from the revenue stream

Quoting scbriml (Reply 39):
I didn't think WTO rules applied to military programs anyway?

It doesn't. That's the point.

Rgds
 
wingman
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RE: WTO Says Boeing Got Illegal $5bn Subsidies

Wed Mar 14, 2012 12:26 pm

Well, to equate this entire debacle to aircraft orders is interesting. After all these years and all the bitterness and legal fees it all just amounts to Lion Air's most recent order. Imagine that, a small budget carrier from Indonesia is basically what it all came down to...$22B. Maybe Airbus and Boeing should just focus on selling their wares and leave the flag waving, stiff arm salutes to the denizens of Airliners.net. It's cheaper, safer, and infinitely more enjoyable.
 
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scbriml
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RE: WTO Says Boeing Got Illegal $5bn Subsidies

Wed Mar 14, 2012 12:34 pm

Quoting neutronstar73 (Reply 42):
A net advantage of 224 aircraft for Airbus. I don't see how that is insignificant

It's not insignificant, but...

Quoting wingman (Reply 45):
After all these years and all the bitterness and legal fees it all just amounts to Lion Air's most recent order.

Or, spread those aircraft over the 40 years that Airbus has existed and you're talking about less than six planes per year.
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ikramerica
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RE: WTO Says Boeing Got Illegal $5bn Subsidies

Wed Mar 14, 2012 1:48 pm

Is it 737s though? Or is it A330s, A350s and A380s? What if the A380 couldnt be launched? How many 747s did that cost Boeing? Would there be 745 and 746s flying around?

And the complaint isn't over the last 40 years, but much shorter.
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EPA001
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RE: WTO Says Boeing Got Illegal $5bn Subsidies

Wed Mar 14, 2012 1:57 pm

Quoting ikramerica (Reply 47):
And the complaint isn't over the last 40 years, but much shorter.


Both parties have left out long time-frames and several segments of the market in their complaints. So that one verdict can be countered with another complaint (if necessary). Let us hope it will not come to that.

But these rulings so far have now brought a lot more clarification on the principles of how governments in the EU and the US are involved in aiding the local industries. I hope common sense returns and the parties will reach a new agreement soon.

But the most important reason why the US walked away from the original treaty )RLI) has not been supported by the WTO. They clearly ruled that RLI (as the EU provides to companies who fulfil the requirements) is a legal way of funding government support in Industrial manufacturing processes.
 
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RE: WTO Says Boeing Got Illegal $5bn Subsidies

Wed Mar 14, 2012 2:43 pm

Quoting tugger (Reply 1):
I am also betting these decisions will be used to target any other nations/regions support of their commercial aerospace sectors.

Canada and Brazil have had it out at the WTO. Russia just recently joined the WTO so maybe complaints will be forthcoming. Not sure about Japan. I have not looked at China's agreement so I can't comment.

Quoting ikramerica (Reply 7):
Why not argue that universal healthcare is a subsidy too? Or that corporate tax rates that aren't the same in one country v another result in a subsidy? Ultimately there is no such thing as a level playing field in international trade. Why the charade from the WTO that it's even possible?

Because those do not target export markets. Subsidies are not necessarily inconsistent with a country's obligations under the WTO agreements. A country can pour money into whatever it wants as long as the subsidies are not contingent on exporting.

Quoting SuperCaravelle (Reply 12):
Boeing and Airbus will not push each other out of the market and they both know it. The government subsidies won't change that for either one.
My main gripe is that with each subsidy, either for A or B, it becomes more difficult for new entrants to enter the market successfully. Something that is, in my opinion, highly needed and at the same time almost impossible

New entrant have entered the market and been successful. How many do you want to be in the market?

Quoting astuteman (Reply 20):
I'd be a bit careful with this argument......

The $18Bn in "subsidies" includes Repayable Launch Investment, which as the name suggests, gest repaid.

That is a subsidy - no need to put quotes around the word.

Quoting usxguy (Reply 26):
I want to know how is this "illegal" ?? Where is the Constitution for Earth? What makes the WTO the "end-all" law?

Both Airbus and Boeing receive 'nationalism' assistance/protection from their respective countries.

It's not illegal - it is inconsistent with a country's obligations under the WTO agreements.

Quoting scbriml (Reply 34):
Guilt and punishment are two different beasts. You're either guilty or innocent - it's a binary state, like pregnancy.

Right, but not really relevant here.
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