The World Trade Organization (WTO) has ruled that the European Union (EU) ignored various previous requests to end offering of subsidies to European aircraft producer Airbus.
The ruling is the result of a case filed by US-based plane manufacturer Boeing in 2006.
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Through the final ruling, WTO has also asked the EU to end its unfair business practices and compensate Boeing for causing harm with the illegal subsidies.
According to the US Trade Representative (USTR), the final WTO ruling paves the way for imposing tariffs on EU goods imported to the US.
In its complaint, USTR said that European countries had provided $22bn of illegal subsidies to Airbus to help launch its A380 and A350 aircraft programmes, inflicting losses to its rival Boeing.
However, the European Commission noted that the majority of the disputed aid stopped in 2011 and only a few issues remained to be solved in the dispute.
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By GlobalDataIn 2011, WTO provided its initial ruling on the case, but the US subsequently complained that France, Germany, Spain and the UK had failed to comply or remove the economic impact of those state aids on Boeing.
Responding to the WTO ruling, Boeing chairman, president and CEO Dennis Muilenburg said: “Today’s final ruling sends a clear message: disregard for the rules and illegal subsidies is not tolerated.
“The commercial success of products and services should be driven by their merits and not by market-distorting actions.”
Both the EU and Airbus said that the WTO had dismissed many of Boeing’s initial claims in the case.
Airbus CEO Tom Enders said: “Today’s significant legal success for the European aviation industry confirms our strategy, which we have followed over all those years of the dispute.
“Of course, today’s report is really only half the story, the other half coming out later this year will rule strongly on Boeing’s subsidies and we’ll see then where the balance lies.”
