In an interim ruling, the World Trade Organization has found that Boeing received substantial subsidies from the U.S government. The news came from French officials, eager to protect the chances of EADS' bid for the KC-X tanker.
“Without going into the details, the summary of the panel’s conclusions condemns the massive subsidies received by Boeing which violate WTO rules and finds in favor of the essence of the European Union’s complaint,” French Environment Minister Jean-Louis Borloo and Transport Minister Dominique Bussereau said in a joint statement. Boeing's most vocal supporters on Capitol Hill quickly rejected the WTO findings, essentially saying that Boeing's subsidies were much smaller than those of EADS.
"The alleged U.S. subsidies of standard economic development tools pale in comparison to the systematic EU strategy to take over the aviation industry. When you compare side by side the alleged Boeing subsidies with Airbus’ confirmed launch aid and illegal subsidies, it’s easy to see who tips the scales," Sen. Sam Brownback of Kansas said in statement. " I am convinced that we must account for illegal subsidies in defense procurement programs, particularly in the case of the new KC-X competition." He was joined in the statement by Rep. Todd Tiarht. Both men hail from Kansas, where Boeing has large plants. The Pentagon has long said that commercial disputes are irrelevant to its acquisition decisions.
EADS NA said the WTO finding supported that Pentagon approach. "The report clearly validates the Department of Defense’s position, namely that ongoing commercial trade disputes between allies are irrelevant to defense acquisitions—including the KC-X tanker competition—and should not be used to circumvent the warfighter’s right to choose the system that best meets their requirements. This definitive finding by the WTO only reinforces the Department’s position,” EADS' spokesman Guy Hicks said.
