GENEVA: Subsidies given by the US state of Washing­ton to Boeing are legal, a World Trade Organisation appeals body said Monday, partially overturning a victory by rival Airbus and the European Union last year.

The two aviation giants have been locked for years in a sprawling set of disputes at the Geneva-based WTO.

Monday’s ruling concerns the so-called “baby Boeing” case that relates only to tax breaks and other incentives provided by Washington State to support production of Boeing’s 777X, which is set to take to the skies in 2020.

Last November, WTO judges found that one of the subsidies Washington State offered was “prohibited” as it encouraged the use of domestic materials, and thus caused trade distortions.

The United States, acting on behalf of Boeing, appealed the decision, while the EU launched a “cross-appeal” for Airbus, insisting that seven of Washington State’s Boeing benefit schemes violated the rules of the 164-member WTO.

Brussels targeted benefits such as a reduced business tax rate, tax credits and exemptions.

The United States secured an outright victory in Monday’s ruling, which is not subject to appeal, the WTO said.

“The latest of the false claims Airbus and its government sponsors have made has now been rejected by the WTO,” Boeing general counsel J. Michael Luttig said in a statement. “This was a sweeping and clean win for the United States,” he added.

According to previous Airbus estimates, Washington State has given Boeing tax breaks worth nearly nine billion dollars in a scheme scheduled to run through 2040.

Published in Dawn, September 5th, 2017