The World Trade Organization on Thursday ruled Boeing was the beneficiary of some $2.7 billion in illegal subsidies from the federal government. U.S. Trade Representative Ron Kirk declared victory because the ruling set aside nearly $20 billion that the European Union alleged the government paid Boeing from as far back as 1989.
Last year a separate WTO panel ruled on a U.S. claim that the EU had paid Airbus, Boeing's rival, some $20 billion in subsidies inconsistent with WTO rules. Kirk said the ruling "confirmed what we have been saying for the last 20 years," that EU subsidies to Airbus dwarf any U.S. government support to Boeing.
The WTO dismissed EU claims that research grants to Boeing from NASA and the Defense Department, state tax incentives and grants to a community college in Washington were inconsistent with the organization's rules.
The USTR said Boeing will have to account for nearly $3 billion in subsidies, including $2.2 billion in tax credits from a law the U.S. repealed in 2006 under pressure from the WTO.
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