Larsen Statement on World Trade Organization Ruling Against European Union

WASHINGTON, D.C.—In a call with U.S. Trade Representative Ambassador Froman, Rep. Rick Larsen (WA-02) today applauded a new trade enforcement action at the World Trade Organization (WTO) concerning more than $18 billion in illegal European Union subsidies to Airbus.

In December 2011, the EU claimed to have removed the WTO inconsistencies, but the United States disagreed and requested a compliance panel to address the issue.

In the report released today, the compliance panel confirmed that the United States was correct: the EU did not come into compliance with respect to the subsidies previously found, and it further breached WTO rules by granting more than $4 billion in new subsidized financing for the A350 XWB - causing tens of billions of dollars in adverse effects to the U.S. industry. In total, the panel found that there have been nearly $22 billion in subsidized financing from the EU and Germany, France, the United Kingdom, and Spain, and continuing lost U.S. exports worth tens of billions of dollars.

“Today’s announcement confirms what the U.S. has suspected for some time: that the European Union was unfairly subsidizing Airbus at the expense of American companies and workers – including many in my District,” said Larsen, the ranking member on the House Subcommittee on Aviation. “I will continue to work so that American workers get a fair shot and so that U.S. trading partners who break the rules are held accountable.”

The compliance panel found that since 2006, subsidies to the Airbus A320 family of aircraft resulted in the displacement or impedance of Boeing 737s in the EU, Australia, China, and India markets, as well as lost sales of 271 737s. In the twin-aisle market, which includes Boeing’s 767, 777, and 787, the panel found that the subsidies benefitting the A330, A340, and A350 XWB caused displacement or impedance of Boeing aircraft in the EU, China, Korea, and Singapore markets, as well as lost sales of 50 Boeing aircraft. 

When it came to the largest aircraft – the panel found that subsidies benefitting the A380 caused displacement or impedance of Boeing 747s in the EU, Australia, China, Korea, Singapore, and UAE markets, as well as lost sales of 54 Boeing aircraft. 

In total, the panel found that nearly $22 billion in subsidized financing from the EU and Germany, France, the UK, and Spain caused tens of billions of dollars in lost U.S. exports. These subsidies – and the resulting loss in Boeing sales – also came to the detriment of the more than 21,000 Boeing jobs in Washington’s 2nd District.

Since 2009, USTR has brought 23 enforcement actions at the WTO. The United States has won every one of these disputes decided thus far.

Larsen has championed efforts to hold other countries accountable when they engage in unfair trading practices. In 2010, Larsen urged U.S. Trade Representative Kirk to hold the EU accountable for illegally subsidizing Airbus. Last year he pushed for legislation which created a Trade Agreements Enforcement Trust Fund to pay for enforcement actions against other countries that break trade rules.

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