DS316: European Communities and Certain Member States — Measures Affecting Trade in Large Civil Aircraft

The DSB adopted the Panel and Appellate Body reports (WT/DS316/R and WT/DS316/AB/R) on the EU's subsidies to its civil aircraft industry. 

The US thanked the panel, the Appellate Body and the Secretariat for their hard work. The US said that Airbus was now into its fifth decade of benefiting from the massive amounts of market distorting launch aid on past models. The launch aid subsidy added up to some USD18 billion in payments, according to the US. The US added that the EU and its member states would have to move quickly to comply with their obligations to withdraw the subsidies or remove their adverse effect within the six months period provided under Article 7.9 of the Agreement on Subsidies and Countervailing Measures (SCM).

The EU regretted the findings of actionable subsidies in this case but nonetheless welcomed the Appellate Body report that, according to the EU, corrected a number of errors committed by the Panel. Referring to the figure of USD 18 billion quoted by the US, the EU said that neither the Panel report nor the Appellate Body report contained a quantification of the subsidy amount granted. The EU said that this case was exceptional in various ways not least because of its complexity and length. The case also showed, according to the EU, that the WTO dispute settlement system was capable of adjudicating disputes of this kind while ensuring protection of highly sensitive information and transparency through open hearings and publication of submissions at the same time. 

China noted that the Appellate Body report made a significant contribution to the interpretation of subsidies, including systemic issues related to the life of a subsidy, the infrastructure measures, the export subsidies and the determination of serious prejudice. China hoped that the EU would take appropriate steps to withdraw subsidies found inconsistent with the SCM Agreement, or remove the adverse effects caused by them to ensure that the industries of other WTO members would not suffer from such adverse effects any longer. 

Brazil said that it continued to be concerned about distortive effects of subsidies of a particularly pernicious nature such as the launch aid measure that were at issue in this case. Brazil highlighted some of its concerns regarding the Appellate Body interpretation on export subsidies. Brazil believed that the panel and Appellate Body findings would help safe-guard the disciplines of the SCM Agreement in a way that contributed to ensuring a level playing field, where manufacturers can develop products and compete with each other on the basis of their own strength, and not on the basis of the leverage provided by national treasuries.

Canada welcomed the Appellate Body adoption of a rigorous test to demonstrate de facto prohibited export subsidies.

Australia said that export subsidies were prohibited because of their potential to directly distort international trade. Australia added that it was therefore imperative that members, when designing public programmes, were clearly aware of the rules that determined whether a particular programme would amount to an export subsidy. Australia added that the Appellate Body developed that test for determining export contingency and thus the test for determining whether a particular subsidy amounted to a prohibited export subsidy.

  

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Next meeting 

The next regular meeting of the DSB will be held on 17 June 2011.