Overview

A WTO Panel has ruled that support provided to Airbus by the European Communities and four EU member States is inconsistent with the WTO Agreement on Subsidies and Countervailing Measures (SCM Agreement).

This much-anticipated Panel report is the first ruling by the WTO in the tit-for-tat aircraft subsidies row between the EC and the United States.

The United States established violations under four of the five broad categories of measures
it challenged:

• “Launch aid” (or “member State financing”), a form of long-term preferential financing for Airbus which the United States argued was provided on “unsecured, back-loaded, success-dependent and below-market interest rate repayment terms”;
• Infrastructural grants, such as the provision of facilities to Airbus;
• Corporate restructurings, mainly in the form of equity infusions; and
• “Research and technological development funding” focused on aeronautics.

A fifth category of US claims – against loans provided by the European Investment Bank - failed. The Panel agreed that these loans constituted subsidies, but found that they were not “specific” to Airbus, and therefore
not actionable.

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