European ministers to raise concerns over Boeing tax breaks

ReutersMay 21, 2014 

BERLIN —Ministers from France, Germany, Britain and Spain said they will work together with the European Commission to raise their concerns over tax breaks received by The Boeing Co., which they said represent unfair subsidies.

Boeing has received $8.7 billion in tax breaks from Washington state for production of its latest jet, the 777x, and European rival Airbus on the eve of the Berlin Airshow ILA described the tax breaks as “unacceptable.”

The so-called “Airbus ministers,” who regularly meet at Europe’s three airshows in Paris, Farnborough and Berlin to discuss the civil planemaking business of Airbus, said they would support the commission in making additional representations about the subsidies and would raise written concerns.

The move could open a tense new phase in the decade-old formal trade dispute over aircraft industry aid, as Brussels and Washington argue about whether they have complied with rulings by the World Trade Organization, which in turn could set the tone for sanctions.

“This is an additional distortion of the competition rules,” Frederic Cuvillier, the French minister for transport, seas and fisheries, told journalists at the Berlin ILA Airshow.

British business minister Michael Fallon said he had raised the issue with the U.S. Department of Commerce and Boeing during a trip to Seattle last month.

Boeing has responded by saying that the tax breaks are available to all aerospace companies operating in the state.

The ILA Airshow is the world’s oldest airshow and expected to welcome over 200,000 visitors, but it is much smaller than Europe’s main airshows in France and Britain and lacks the order fireworks of those two.

Separately at the airshow on Tuesday, Airbus Defense & Space announced a contract to supply a series of weather satellites to the European Space Agency in low orbit, with industry sources valuing the deal at 1.2 billion euros.

Airbus had previously lost a race for higher geostationary satellites to French rival Thales.

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