Boeing faces WTO sanctions

The WTO as early as Monday is expected to rule that Boeing has been granted illegal state subsidies for its newest long-range jetliner, according to people familiar with the finding. The judgment involves tax incentives Boeing will receive from Washington state to build its new 777X widebody plane, the latest round in a long-running dispute between the US and the EU over support for Boeing and Airbus. Boeing said the value of the 777X tax incentive is $50m a year. Aircraft cases take years to resolve before the trade organization but are closely watched as evidence of the effectiveness of international rules. Donald Trump’s election victory and focus on trade are turning a new spotlight on such cases, and sanctions from earlier WTO judgments involving the two jet makers may start to be imposed next year. The EU almost two years ago voiced concern at the WTO about the support package for the 777X, a revamped version of Boeing’s existing 777 long-range plane. The updated model has attracted more than 300 orders from carriers including Emirates Airline and Lufthansa. The EU said Boeing had lined up more than $8b in prohibited subsidies for the 777X program and that those subsidies need to be immediately rescinded. US officials have called the $8b figure inflated. The WTO isn’t expected to put a value on the tax break it is expected to strike down. The WTO is expected to deny most of the EU claims, but agree that a key income-tax break offered by Washington state represented a prohibited subsidy that would have to be withdrawn, the people said.<br/>