BOEING CLAIMS VICTORY. WTO Rules in Airbus-Boeing Dispute

 By Todd Horwitz, Bubba Trading.

 

A World Trade Organization ruling handing the U.S. a victory over the European Union in their multibillion-dollar jetliner fight may test Europe’s efforts to defend global trade rules from Trump administration criticism. The WTO on Tuesday brought the U.S. a step closer to imposing potentially billions of dollars’ worth of trade retaliation against the EU over subsidies provided to plane maker Airbus SE that Washington says have harmed Boeing Co.

The EU and members France, Germany, Spain and the U.K. “failed to comply with an earlier WTO panel ruling by maintaining illegal subsidies for the European aircraft manufacturer Airbus,” the WTO said.

Boeing chairman and chief executive Dennis Muilenburg declared victory Tuesday.
“Today’s final ruling sends a clear message: disregard for the rules and illegal subsidies are not tolerated,” Muilenburg said. A lawyer close to the case on the U.S. side discussed the details of the ruling in advance on condition of anonymity and provided an analysis of the outcome favorable to Boeing.

He said the ruling “is truly the final decision in the litigation,” and the threat of tariffs could force European governments to rein in their financial support for Airbus. “The difference now is that there are actual economic consequences,” he said. “That usually focuses the mind.” The implication is that the U.S. will use the decision and the threat of tariffs in any settlement negotiations.

Boeing said the harm done from the roughly $9 billion in subsidies Europe provided on the A350 and A380 planes would run into billions of dollars. Airbus said any potential sanctions would be “minor.” Both Boeing and Airbus have said they are open to talks to resolve the dispute. The U.S. has said, though, such talks can start only once the European side has come into compliance with WTO rules.

Keep those stops tight
Todd “Bubba” Horwitz

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Todd Horwitz - Author of “Average Joe Options“. Todd began his trading career in 1980 at the CBOE. He was one of the original traders in the OEX & helped start the SPX. He is a member the CME where he trades S&P futures as well as foreign currencies & is a regular contributor to CNBC, Bloomberg, BNN, Fox & many other major news networks.