DS: United States — Measures Affecting Trade in Large Civil Aircraft

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Key facts

 

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Summary of the dispute to date

The summary below was up-to-date at

Consultations

Complaint by the European Communities. (See also dispute DS353)

On 6 October 2004, the European Communities requested consultations with the United States concerning prohibited and actionable subsidies provided to US producers of large civil aircraft (LCA) and in particular the Boeing company, as well as legislation, regulations, statutory instruments and amendments thereto providing such subsidies, grants, and any other assistance to the US producers (US LCA industry).

According to the request for consultations from the European Communities, the measures cited in its complaint, including certain legislation, regulations, statutory instruments and amendments thereto provide prohibited and actionable subsidies, grants, and other assistance to US producers of large civil aircraft, particularly the Boeing company, contrary to certain provisions of Articles 3.1(a) and (b), 3.2, 5(a) and (c), and 6.3(a), (b) and (c) of the SCM Agreement and Article III:4 of GATT 1994.

The measures cited in the EC complaint include specified state and local subsidies for the production of the Boeing 7E7; specified NASA research and development subsidies; specified Department of Defense research and development subsidies; specified National Institute of Standards and Technology subsidies; FSC/ETI subsidies; research and experimentation tax credits; NASA procurement contracts, and other subsidies.

The EC notes that the cited US, state, and local statutes, regulations, and administrative procedures are inconsistent with the SCM and GATT 1994 provisions referred to above, as such and as applied.

The EC further notes that the use of these measures causes adverse effects (i.e. serious prejudice or a threat of serious prejudice) to the interests of the EC and material injury or threat of material injury to the EC large civil aircraft industry in a manner that violates US obligations under provisions of Articles 5 and 6 of the SCM Agreement.

On 31 May 2005, the European Communities requested the establishment of a panel. At its meeting on 13 June 2005, the DSB deferred the establishment of a panel. On 27 June 2005, the European Communities requested additional consultations.

 

Panel and Appellate Body proceedings

At its meeting on 20 July 2005, the DSB established a panel.  Australia, Brazil, Canada, China, Japan and Korea reserved their third-party rights.

At its 23 September 2005 meeting, the DSB initiated the procedures provided in Annex V of the SCM Agreement.

On 7 October 2005, the European Communities requested the Director-General to compose the panel. On 17 October 2005, Deputy Director Alejandro Jara, acting in place of the Director-General composed the panel.

On 13 April 2006, the Chairman of the Panel informed the DSB that it would not be possible for the Panel to complete its work in six months in light of the substantive and procedural complexities involved in this dispute, including the process of developing information concerning serious prejudice under Annex V of the SCM Agreement, the establishment of a second Panel at the request of the European Communities on 17 February 2006, and the Panel's subsequent agreement, at the parties' request, to set aside the original timetable for the dispute until an unspecified date in the future. The Panel expects to complete its work in 2007.