Introduction

427. This dispute concerns a challenge brought by the European Communities against a broad array of subsidies allegedly provided by the United States to The Boeing Company in relation to the manufacture of large civil aircraft (“LCA”). In particular, the European Communities challenged subsidies allegedly provided by the US Federal Government; the States of Washington, Kansas, and Illinois; the counties of Snohomish (Washington) and Cook (Illinois); and the cities of Everett (Washington), Wichita (Kansas), and Chicago (Illinois).

428. The European Communities claimed before the Panel that each challenged measure is a specific subsidy within the meaning of Articles 1 and 2 of the SCM Agreement, and that the United States, through the use of these subsidies, has caused adverse effects to the European Communities' interests within the meaning of Articles 5 and 6 of the SCM Agreement. In addition, the European Communities claimed that some of the Washington State tax incentives and the Foreign Sales Corporation (“FSC”)/extraterritorial income (“ETI”) tax exemptions are prohibited export subsidies within the meaning of Article 3 of the SCM Agreement.

429. Because of the large number of claims made and measures challenged, and in order to provide some background to and context for our findings in this appeal, we consider it useful to provide an overview of the measures at issue in this appeal. For a more detailed account of the measures at issue, direct reference should be had to the Panel Report.