GENEVA - BOEING and Airbus expect to find out on Friday who won the first round in their epic trade dispute, when the World Trade Organisation rules on a five-year-old US complaint that argues European governments unfairly financed Airbus' climb to world No 1 planemaker.
The ruling could pressure Europe to rethink how it funds a strategic company that employs 52,000 people and provides work for numerous suppliers. It could also affect competition for a US$35 billion (S$50.4 billion) US Air Force contract for air tankers.
The United States hopes the trade body will condemn the European Union, representing Britain, France, Germany and Spain, for providing what it calls illegal subsidies that give Airbus, based in Toulouse, France, an advantage in a market worth US$3 trillion over the next two decades.
For its part, the 27-nation EU believes a verdict in its favor would shift the focus back onto what it considers the backdoor funding that Nasa and the US Defense Department provide to Boeing.
That complaint from the EU will be the subject of a second ruling expected in six months.
Beyond the two companies, the dispute could have its greatest impact on emerging powers such as China which want to break the two-company dominance of the airliner industry. Those governments would learn how far they can go to help companies develop commercial planes.
The ruling is expected to be confidentially given to US and European diplomats in Geneva, trade officials and the companies say.
'This is something that is not going to have anything good for these two companies,' said Frederik Erixon of the European Centre for International Political Economy, a Brussels think tank. 'Boeing is going to win on key issues in the first ruling and Airbus is going to win on key issues in the second ruling.'
The US says Airbus has received development financing, contributions and debt relief worth the equivalent of up to US$205 billion, helping it develop new aircraft, capture long-standing Boeing customers and become the world's top seller of planes.
The EU, meanwhile, points to tax breaks, development funding and outright grants to Boeing as examples of wrongdoing by the US government and the states of Kansas, Illinois and Washington. It also accuses the US of providing vast amounts of hidden support to Boeing through military contracts, citing a total subsidy figure through 2024 of US$23.6 billion. -- AP
