WTO rules against US tax breaks for Boeing’s new 777X aircraft
The World Trade Organisation (WTO) has ruled that a tax benefit granted by Washington, US, to help Boeing manufacture its new 777X long-haul aircraft family was a prohibited subsidy.
According to WTO, the subsidy granted in 2013 under Washington state's business and occupancy (B&O) tax breaches international trade rules.
In December 2014, the EU filed a case with the WTO against the US over dispute of subsidies to aircraft manufacturers.
As a result, WTO has asked the US state to withdraw the subsidy in 90 days, reported Wall Street Journal.
However, both the EU and the US can appeal the latest WTO ruling.
Boeing said that WTO has found that the company has not received any benefit from the 777X rate incentive, and will not receive any until 2020, because the first airplane will not be delivered until then.
Responding to the WTO ruling, Boeing general counsel Michael Luttig said: "Today's decision is a complete victory for the US, Washington State and Boeing.
"The WTO found in September that Airbus has received $22bn in illegal subsidies from the EU and that without these subsidies neither Airbus itself nor any of its airplanes would even exist today.
“By contrast, in rejecting virtually every claim made by the EU in this case, the WTO found today that Boeing has not received a penny of impermissible subsidies."
The company further noted that in the latest ruling, WTO has rejected majority of the challenge given by the EU.