The World Trade Organization (WTO) Appellate Body in its report issued here on Wednesday upheld part of the European Union's claims against a previous WTO panel rulings that largely in favor of the United States in its claims against EU support to its civil aviation manufacturer Airbus.
The new report by the Appellate Body excluded certain disputed EU measures to Airbus from the list of "serious prejudice," in particular the 1998 transfer of a 45.76-percent interest in Dassault Aviation to Aerospatiale, the special purpose facilities at the Muhlenberger Loch industrial site in Hamburg, and the Aeroconstellation industrial site and associated facilities in Toulouse.
These actions were previously deemed as inconsistent with the Agreement on Subsidies and Countervailing Measures (SCM Agreement).
Moreover, the Appellate Body reversed the panel's findings that stated the financing provided by Germany, Spain and the UK to develop the A380 was contingent upon anticipated exportation and thus forming a prohibited export subsidy.
In addition, certain EU measures claimed by the U.S. as unfair subsidizing through R&D assistance and government loans were also overturned in the new report.
However, bulk of the panel ruling was kept intact under the Appellate Body's report.
The principal subsidizing charges verified by the report include financing arrangements provided by major EU countries for the development of some projects.
Furthermore, the report also upholds the panel ruling on certain equity infusions provided by the French and German governments to companies that formed part of the Airbus consortium, as well as the judges on certain infrastructure measures provided to Airbus.
The Appellate Body also found that the effect of the subsidies have displaced exports of certain types of Boeing aircraft from accessing the market.
On May 31, 2005, after failed consultations with major EU members on their measures that have allegedly given Airbus unfair advantage over its rival Boeing, the U.S. requested WTO Dispute Settle Body to establish a panel on the case.
The panel made its ruling on June 30, 2010, after prolonged investigations due to the complexity of the case the enormous amount of work required.
The ruling was hailed as major victory by the U.S., but appealed to the WTO Appellate Body by the EU on July 21, 2010.