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5 - The Boeing–Airbus Dispute: A Case for the Application of the European Community State Aid Rules?

Published online by Cambridge University Press:  03 May 2010

Kyle W. Bagwell
Affiliation:
Stanford University, California
George A. Bermann
Affiliation:
Columbia University, New York
Petros C. Mavroidis
Affiliation:
Columbia University, New York
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Summary

Introduction

World Trade Organization (WTO) rules do not require that local remedies be exhausted before a complaint can be brought before the Dispute Settlement Body (DSB). Nevertheless it may be interesting to ponder whether it would be possible, or have been possible at an appropriate moment, for Boeing, or one of its subsidiaries, to bring a complaint with the European Community (EC) Commission alleging the granting of incompatible state aid by EC member states. To answer this question, it is necessary to discuss the relevant EC state aid rules. In addition, it will also be interesting to see whether the EC Commission has ever taken any action against individual state measures granting aid to the Airbus companies or one of its subsidiaries or suppliers. These rules will be described in the second section of this chapter.

The analysis of the compatibility of state aid measures normally can be properly undertaken only if we have a thorough knowledge of the company structure of Boeing; in particular, we want to know whether Boeing has subsidiaries or important suppliers in the EC (this seems likely). The following quote from the front page of Boeing's Web site illustrates this point:

Headquartered in Chicago, Illinois, U.S.A., Boeing employs more than 155,000 people in some 67 countries. This represents one of the most diverse, talented and innovative workforces anywhere. More than 83,800 of our people hold college degrees – including nearly 29,000 advanced degrees – in virtually every business and technical field from approximately 2,800 colleges and universities worldwide. […]

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Chapter
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Publisher: Cambridge University Press
Print publication year: 2009

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References

Meier-Kaienburg, N., “The WTO's ‘Toughest’ Case: An Examination of the Effectiveness of the WTO Dispute Resolution Procedure in the Airbus-Boeing Dispute Over Aircraft Subsidies,” 71 J Air Law Commerce 2006, 191, 226–231Google Scholar
Soltesz, U., “The New Commission Guidelines on State Aid for Airports – A Step Too Far…,” European State Aid Law Quarterly 2006, 719, 721Google Scholar
Bovis, C.H., “The Application of State Aid Rules to the European Union Transport Sectors,” 11 Columbia Journal of European Law 2005, 557, 583Google Scholar
Muller, M.N., “State Aid to the Aviation Sector,” in Rydelski, M.S. (Ed.), The EC State Aid Regime: Distortive Effects of State Aid on Competition and Trade (2006), 423, 437. Cameron-May, LondonGoogle Scholar
Muller, M.N., “The Community Framework for State Aid for Research and Development,” in Bilal, S. and Nicolaides, P. (Eds.), Understanding State Aid Policy in the European Community (1999), 101, 106. Kluwer Law International, The HagueGoogle Scholar
Parish, , “On the Private Investor Principle28 European Law Review 2003, 70Google Scholar

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