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It will take years until the WTO makes a final decision.

Airbus gets loans and has to pay interests for these loans. The only real subsidy is that Airbus has not to pay these loans back if the plain is a economic failure but until that day all Airbus models where a economic success.

There are a lot of ways European governments can secure these loans even if there is a WTO ruling because there are no direct subsidies.

Boeing also has a long history of public help and even the new 787 gets public aid.
Ever since their first plane flew in 1916, Boeing has had a symbiotic relationship with the state of Washington. With the launch of the 787, Boeing did the unthinkable: the company would conduct a nationwide search for a site to build the new plane. In the end, it was decided that the Dreamliner would indeed be assembled in Everett, but only after the State of Washington coughed up an incentive package worth $3.5 Billion over 20 years. Boeing estimates that between 800 and 1,200 people will be employed assembling the jet. This means that the State will subsidize each employee working on the 787 by at least $145,000 per year! For a job that might typically pay around $60,000.

So Boeing claims that the European aerospace giant has received $15 Billion in illegal aid and according to Airbus, aid to Boeing has totaled $23 Billion!

So we will see who is right and who is wrong.
Boeing did a good job with the 787 they should better concentrate on producing planes. To believe that Airbus became the number one because of the public aid is the best way to stay number two in the future.

When you start talking about "tax incentives" you are really opening a door to the figurers. BA might pay lower taxes in the first instance than Airbus, or vice versa. So is that a "subsidy?" And if one pays higher taxes, and the government gives it a break so that they are the same, is that a "subsidy?"

It's really impossible to make these determinations with any degree of logic or accuracy. The only real solution is to let the market make the call, and tell both the EU and the Congress that the normal WTO restrictions and procedures won't be applied.

The reality is that the WTO has not worked anyway. The theory behind the WTO was to reduce the number of trade disputes, but in fact, it has increased the number of trade disputes. Anytime you tell someone they have a legal right, there is going to be a dispute. Under the old system, you were on your honor, and the only thing that constrained you was the fact that tarrifs and quotas were bad policy.

So, a state in the united states, which has it's own tax code independant of the federal tax code, decides to give a company an incentive to build a factory (thus increase jobs and tax revenue for the state) in the state, and this is equivalent to national government(s) (and the EU itself) "loaning" a company money to create a product it could not otherwise afford to create / sell - and most importantly, does not need to be paid back if the product flops??

It is also equivalent to "coercing" other foreign governments to purchuse the airbus (see India, Thailand etc...)?

How about the municipal, state, federal and other "tax breaks" that Airbus receives?

Oh, and don't forget the defense contracts as well.

One final point for balance.

Ask yourself, if Airbus has only had comercial sucesses,
why are they unable to secure the needed capital by borrowing from a bank? Furthermore, what is the purpose of the "subsidies" that Airbus receives, to promote "growth and job creation" or to help compete with Boeing?

"European aerospace giant has received $15 Billion in illegal aid"

Airbus begged for this issue to stay out of the WTO. In fact, they offered to reduce their illegal aid by 33% which is not exceptable- 100% or nothing.

This morning an EU official (Mandelson) said that the EU will turn this issue into a "full-blown trade war" his words.

The US should take him at his word and annonce that no A380 will be allowed on US soil until this issue is resolved.

It's been a long time in waiting, so let the trade wars begin.

Holtz
JeffersonRepublic.com