Bbc world business report 2003 ford

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Bbc world business report 2003 ford

Share WTO's Boeing ruling could fuel subsidy debate, make settlement more difficult The World Trade Organization ruled that Boeing has received illegal government subsidies, but sources said the amount is just a fraction of the Airbus subsidies previously ruled improper.

If that interpretation is confirmed when the still-confidential ruling is made public, the outcome could be a major setback for the EU's claim that subsidies to Airbus and to Boeing are roughly in balance. That may make a negotiated settlement of the long-running subsidy dispute even more difficult, and could further fuel the already contentious debate over which company should win the huge Air Force contract for refueling tankers.

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Trade Representative Ron Kirk, said Wednesday that the ruling "pales in comparison to the WTO's earlier findings that Airbus benefited from illegal subsidies.

She said she could not provide specifics because the WTO's ruling has not been made public. According to the U. The WTO panel ruled that a portion of the defense-research money was also illegal and actionable, although the amount was not quantified.

But a source close to the European side of the case, also speaking anonymously, sharply differed on how the ruling should be interpreted.

And he said the damages to be paid over any given illegal subsidy are a much larger amount than the subsidy itself. Costly damages The person close to the U. If the imbalance in the two outcomes is confirmed, it may make a negotiated settlement even more difficult.

bbc world business report 2003 ford

Boeing has been keen to ensure compliance with WTO rules so that Airbus cannot take government loans to fund the A jet under development. European governments have agreed in principle to provide such loans — known as "launch aid," and repayable through installments with each plane delivery only after a jet program succeeds.

Despite the June ruling, Airbus insists it intends to take that money for the A Boeing called on Airbus to play by the rules by "withdrawing their still-outstanding A prohibited launch-aid subsidy and financing the A on commercial terms.

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Boeing's congressional supporters want the Pentagon to consider the impact of illegal subsidies when awarding that bitterly fought contract.

A decision on the winner is expected next month. Jay Inslee, D-Bainbridge Island, said that even if the Defense Department is not required to factor in the WTO's opinions in awarding the tanker work, the latest ruling "should send a strong message to the Pentagon" that the two companies have not been competing fairly.

As for the Washington state tax breaks, the fact that the WTO has found them illegal won't get state taxpayers off the hook. The agreement Washington signed with Boeing, known as "Project Olympus," contains a provision designed to protect Boeing's financial interest in the event the tax breaks have to be withdrawn for any reason.

The agreement mandates that if anything changes the state's financial obligations or commitments to Boeing, the state must replace the tax breaks with an economically comparable arrangement acceptable to Boeing.

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