US told to withdraw $20bn Boeing aid, says Europeans

The World Trade Organisation has found that the aircraft maker Boeing received more than $20bn in US government subsidies challenged by the European Union and called for them to be withdrawn, a European source told the Reuters news agency last night. The ruling, if confirmed, would add weight to European calls for a negotiated settlement to the transatlantic row over the aerospace industry – the biggest bilateral trade dispute – following WTO condemnation in June of illegal European subsidies for Boeing rival Airbus.

In the past, however, both sides have accused the other of putting out misinformation, so early leaks must be treated with caution. The confidential report, issued only to EU and US officials, will not be made public until possibly mid-2011.

The source said the WTO had backed EU complaints over some $17bn in research contracts from Nasa and the Pentagon, and $4bn in tax breaks from Washington state.

But the WTO dispute panel did not find that aid challenged by the EU was prohibited – as it did in a ruling in the parallel case against Airbus subsidies brought by the US.