Monday, November 28, 2016

WTO: war in Airbus-Boeing made the business of China –

everywhere, ball in the center. Two months after a decision invalidating a part of the european aid to Airbus, it is the turn to Boeing to see some of the us subsidies deemed illegal by the WTO. A panel of experts of the organization said on Monday, November 28, as a part of the subsidies paid by the State of Washington to Boeing for future long-haul 777X were prohibited by the rules of the WTO, and that the United States had 90 days to put an end to it. At Airbus, we scream victory: “After this historic decision today, illegal subsidies shall be cancelled without further delay, involving the waiver by Boeing of these grants massive tax,” says Tom Enders, chief executive officer of Airbus Group.

european aircraft manufacturer an estimated $ 26 billion is the total of illegal subsidies paid to Boeing, of which 9 billion paid by the State of Washington (where are installed two big factories of Boeing, Renton and Everett) for the 777X. What ensures Airbus, finance at 100% the development of this future long-haul of 350 to 400 seats planned for 2020. The group estimates the total loss related to aids undue Boeing to 95 billion dollars. “The difference of loans granted to Airbus – whose interest rates are the subject of the dispute WTO against the european Union – Boeing does not provide any form of reimbursement”, says John Harrison, group legal director of Airbus. Boeing obviously has a different view of the decision : “The WTO has totally rejected the complaints of the EU on six of the seven tax incentives and dismissed most of the complaint of the european on the seventh measure,” responds the american company.

Call Boeing likely

Two months earlier, on the occasion of a WTO ruling on subsidies to Airbus, this is the american group who was proclaimed the winner of this legal dispute old to 12 years old, estimating the illegal subsidies affected by Airbus at $ 22 billion. The american giant ensured even as the United States would launch retaliatory measures that “could reach $ 10 billion dollars per year.” “The world trade Organization has now been established that Airbus is, and has always been, a creature of european governments and the result of government subsidies illegal”, before nappa landed J. Michael Luttig, director of legal affairs at Boeing. In both cases, the amounts are unverifiable : the figures of the complaint, Airbus, such as those derived from the Boeing, are not extracts of the decisions of the WTO, but rather estimates of each camp, which allows all the calculations and approximations.

Who will win this ruthless war legal, where the two sides go blow for blow with a great deal of releases assassins? The answer is already known: a person. First, because as with all the previous decisions, Boeing will very likely be appealed, as Airbus has always done this also. These calls grow back each time to the Greek calends a hypothetical final outcome. On the other hand, it is sufficient that the two camps groom slightly in their support system to their aircraft manufacturers to ensure that the procedure leaves zero. The WTO will then have to re-study all the mechanisms, and its decision will again be subject to appeal. The decisions she takes at the end of these new reviews are also likely to call. Finally, the WTO is neither a court nor a police officer: she cannot force a group to repay the aid which is deemed illegal.

Outcome impossible

One wonders, therefore, why the two camps continue this improbable game of ping-pong a legal and verbal. Groups aviation are subsidized to launch their new models? The beautiful case! This has always been the case in commercial aviation. The only difference is the method: the United States is supporting Boeing with technology contracts from Nasa, the Pentagon, and the aid of the States. The EU supports Airbus with a system of repayable advances, with an interest rate set with each of the States involved. China (Comac), Brazil (Embraer), Canada (Bombardier) also provide funding without complex their aviation industries national. “The only logical to continue this war, Airbus-Boeing, it is the war itself”, summarizes in the european side.

The only possible outcome would be an agreement between the United States and the EU on the mechanisms, licit and illicit. Airbus says loan terms not to waive its repayable advances that have been, according to him, judged legal by the WTO. Boeing and Washington are, on the contrary, the end of the repayable advances is a condition sine qua non for the opening of discussions. The war continues, therefore, more beautiful, to the delight of the law firms who charge millions of dollars to the two camps.

China laughs

The case also makes the happiness of the new entrants to the market, led by China. While Airbus and Boeing are écharpent before the WTO, Beijing finance quietly, and in lost funds to its champions aeronautical, without that no one would dare him mess. “The United States and the EU will never procedure against China for fear of spinning the orders of the chinese competitor,” says a source close to Airbus. Another illustration of the grotesque procedure WTO.


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