A case for settlement

In fact there’s a depress­ing pre­cen­dent for the cas­es announced yes­ter­day bq. In a dis­pute set­tle­ment case filed at the Gene­va head­quar­ters of the WTO, the US alleged that Air­bus had received a total of at least $15bn in ille­gal “launch aid” from the France, UK, Ger­many and Spain, allow­ing it to over­take Boe­ing as the world’s largest air­craft mak­er. …  The EU Com­mis­sion respond­ed imme­di­ate­ly by fil­ing a counter-case charg­ing that Boe­ing had received about $23bn in pro­hib­it­ed sub­si­dies since 1992 in the form of research and devel­op­ment assis­tance from US gov­ern­ment agen­cies. The EU also chal­lenged pledges from Wash­ing­ton state to offer about $3bn in tax breaks for Boe­ing pro­duc­tion of its new 7E7 jet. (“Finan­cial Times”:http://www.ft.com/cms/s/ea4b2a3a-179b-11d9-9ac5-00000e2511c8.html) The Cana­di­an and Brazil­ian air­craft indus­tries went head-to-head in a “legal battle”:http://www.wto.org/english/tratop_e/dispu_e/dispu_subjects_index_e.htm#bkmk2 over sub­si­dies to their com­muter air­lin­er indus­tries for many years, with the result that both were found to be wrong­do­ers in one mea­sure or anoth­er. The US-EU bat­tle now enters a 60 day peri­od of con­sul­ta­tions man­dat­ed by the WTO dis­putes timetable that, fre­quent­ly these days, is abortive. They should hope not in this case. The WTO dis­pute rules pre­fer set­tle­ment between the par­ties, par­tic­u­lar­ly in a case such as this where the nature of the dis­pute calls for a polit­i­cal rather than legal rec­on­cil­i­a­tion. As in munic­i­pal law, not all dis­putes are appro­pri­ate for WTO adju­di­ca­tion: # The reg­u­la­to­ry and pol­i­cy facts relat­ed to the air­craft sup­ports are extreme­ly com­plex; adju­di­ca­tion of them will prob­a­bly require a tor­tured exe­ge­sis of the rather sim­ple WTO rules that won’t sat­is­fy any­one
# There are com­pound­ed legal com­pli­ca­tions relat­ed to a pri­or, un-resolved, dis­pute (part of the EU case is that the USA is sub­si­diz­ing Boe­ing to the val­ue of USD200 mil­lion each year through a still-uncom­pli­ant suc­ces­sor to the dis­put­ed “FSC legislation”:http://www.inquit.com/article/6/tax-breaks-fracture-fsc-revision )
# The com­mer­cial inter­ests are so large that the ‘los­ing’ side—whose oblig­a­tion will be only to bring its laws into con­for­mi­ty with the WTO agree­ments breached—will prob­a­bly make changes that do not, in the end, remove the com­mer­cial advan­tages pro­vid­ed by the cur­rent laws In oth­er words, this is a case where a WTO rul­ing, obtained even after a mas­sive­ly dif­fi­cult adju­di­ca­tion, would prob­a­bly not make any dif­fer­ence to the sit­u­a­tion on the ground. The US and EU should work very hard to set­tle this dur­ing the con­sul­ta­tion phase.

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