WTO Finds Against 777X Tax Incentive

The World Trade Organization has found that tax incentives for the aerospace industry that Washington state passed in 2013 were a prohibited subsidy.

Washington passed the Engrossed Substitute Senate Bill, which amended and extended tax incentives, to encourage Boeing to base development and construction of the 777X in the state.

The European Union requested consultations in late 2014 with the United States on “tax incentives in relation to the development, manufacture, and sale of large civil aircraft.” The EU alleged that the measures constitute specific subsidies.

No value was attributed to the state aid, but Airbus said the incentives had cost it USD$50 billion in lost sales.

The ruling can be appealed by either the United States or the European Union.