DSB February 2015

Monday’s DSB established a panel to study a complaint by the EU against the US over alleged tax incentives for the manufacturing of large commercial aircraft.

The EU requested the immediate establishment of a panel under the “fast track” provisions of the Subsidies and Countervailing Measures (SCM) Agreement, in case of possible prohibited subsidies. The DSB established a panel. Brazil, China, India, Japan, Korea and the Russian Federation reserved their third-party rights to participate in the panel’s proceedings.

The EU said that, in 2013, Washington State had decided to extend, until the end of 2040, significant tax breaks already found to be illegal in 2012. These subsidies created a disadvantage to the European aircraft industry and were also conditional upon the use of domestic over imported goods. In the EU’s view, the 2013 Washington State measure is inconsistent with the SCM Agreement. Consultations held on 2 February 2015 could not resolve the dispute.

The US said that it believed that its measures are fully consistent with its obligations under the relevant WTO agreements. The US was of the strong view that the EU’s actions should not be allowed to delay further the first aircraft dispute, “EC — Large Civil Aircraft”, which had already suffered significant delays.

At the DSB meeting, three other request for establishment of the panel were deferred.

WTO pic