An Analysis of the Airbus-Boeing Dispute From the Perspective of the WTO Process

The longstanding trade dispute between Boeing (US) and Airbus (EU) over government subsidies has increased in intensity over the past few years, with both parties filing complaints at the World Trade Organization (WTO) in May 2005. The aim of this paper is to analyze this dispute and its implications by reviewing the general characteristics of the large civil aircraft (LCA) industry and the particular legal roots of this dispute. The paper focuses on recent developments in terms of the WTO process. The main argument of this paper is that the WTO process is unlikely to produce a feasible and effective solution to the dispute. This is due to the characteristics of the LCA industry, complicated relations between the main producers and their governments, the historical roots of the dispute and the legacy of international arrangements on subsidies for the industry, and most importantly, the current structure of the WTO system.