The long-running debate between the US and the EU over government supports for large commercial aircraft has recently boiled over into a major dispute involving the World Trade Organisation (WTO). While the two sides have currently backed off from what could be a very damaging WTO outcome, there are still wide differences over the legitimacy of government supports (direct or indirect) for Airbus and Boeing airliners. This paper:• Describes the background to the current dispute.
• Analyses the 1992 US-EU Agreement on Large AircraftSubsidies.
• Outlines the WTO Agreement on Subsidies and CountervailingMeasures and the decision by the US to mount an action under the WTO complaints procedures against launch investment for Airbus and the EU's counter claim against Boeing.