Washington gave Boeing illegal tax breaks, WTO rules

GENEVA - U.S. plane maker Boeing received major illegal tax breaks from Washington state, a world trade body ruled Monday, adding that the federal government should now take action to end that support within months.

The Chicago-based company and the European Union, which backs Boeing's key European rival Airbus, both claimed the ruling by the World Trade Organization as a victory in a longstanding battle for contracts between the two aerospace giants.

The WTO found that the support Washington state promised to give Boeing from 2024 to 2040 amounted to "prohibited" subsidies. The support offered by Washington came on condition that Boeing keeps the production of the wings for the wide-bodied 777X plane in the state, effectively excluding foreign competition. Boeing has extensive plants around Seattle.

The 28-member bloc said the WTO had ruled that $5.7 billion in subsidies were illegal, out of a total $8.7 billion in measures that it reviewed.

But Boeing called that figure excessive and said only "future incentives" of $50 million a year were found impermissible in the WTO decision.

Appearing to counter both, a Geneva-based trade official, speaking on condition of anonymity because he was not authorized to speak publicly about the matter, said the ruling addressed only the legality of the measures, and not the possible financial benefit that could be drawn from the subsidy.

The ruling is but a part of a wider squabble involving accusations between the U.S. government and the 28-nation EU over support for Boeing and Airbus dating back to 2004.
 

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