WTO members agreed at a meeting of the Dispute Settlement Body (DSB) to authorize the United States to impose countermeasures on European Union goods and services trade with the US up to a value of USD 7,496.623 million annually.
The authorization was granted in line with a WTO arbitrator decision issued on 2 October.
The authorization was granted as a result of the WTO's rulings in DS316 which found that the European Union and certain EU member states failed to remove subsidies for the European aircraft manufacturer Airbus which had caused harm to Airbus's US rival Boeing in the form of lost and impeded sales of Boeing aircraft.
The United States told the DSB that the level determined by the arbitrator is the largest amount ever awarded by a WTO arbitrator and documents the US point that the EU’s subsidies to Airbus have for decades caused massive harm to the US economy.
Nevertheless, it is the US preference to find a negotiated outcome with the EU that ends all WTO-inconsistent subsidies, an objective it has had from the outset, the United States said.
But that can only happen if the EU genuinely terminates the benefits to Airbus from current subsidies and ensures that subsidies to Airbus cannot be revived under another name or another mechanism.
The United States said that for 15 years the US has indicated its desire for such an agreement but that the EU had consistently failed to engage in serious discussions.
The US added that it hoped the countermeasures will encourage the EU to agree to a genuine cessation of its WTO-inconsistent subsidies and the adverse effects that flow from them.
The European Union said that the arbitrator's decision raises serious concerns.
First, there is no analysis in the report of the amount of benefit or the alleged price effects; the alleged volume effects are largely based on the assumption that Airbus or its products should not exist.
Second, awarding recurring annual countermeasures for an indefinite period in response to non-recurring measures, the benefit and adverse effects of which are constantly diminishing, is a breach of the rule that countermeasures must be commensurate with the degree and nature of adverse effects.
Third, the EU said, the award disregards the risk of over-counting resulting from cumulating nullification or impairment from both orders and deliveries at the same time.
Fourth, the award contains a finding that the hypothetical impedance associated with six country markets where impedance was found coincides with the total number of aircraft that Airbus sold in those markets, without any US effort to substantiate that assertion.
And fifth, the award systematically avoids taking into account the treaty terms that support the view that the volume effects of competing subsidies cancel each other out. ■