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WTO to rule on illegal Boeing subsidies

Boeing and Airbus labels

TEXT OF STORY

STEVE CHIOTAKIS: The World Trade Organization is set to rule on a complaint against American aircraft maker Boeing. The charge? That the U.S. government is illegally subsiding the company and placing its rival -- Europe's Airbus -- at an unfair disadvantage. Marketplace's Stephen Beard is with us live from our London bureau with the latest. Hi Stephen.

STEPHEN BEARD: Hello Steve.

CHIOTAKIS: So this complaint has been going on now for what -- six years? Why has it been dragging?

BEARD: It's very complex. You've got two major companies and each has complained that the other is getting unfair state aid. Now the WTO ruled earlier this year against Airbus. It agreed that Airbus had benefited from low interest rates loans from European governments. Today, the Europeans have their day in court. The WTO rules on the EU's case against Boeing.

CHIOTAKIS: And do we have any indication, Stephen, as to how the WTO's going to rule?

BEARD: Well, we won't know for sure until later today. But observers say the WTO is likely to rule that Boeing also received unfair aid in the shape of $20 billion in Department of Defense and NASA research subsidies. If correct, this means both sides have lost.

Laurie Price, aviation analyst with consulting firm Mott MacDonald, says it's time for both the U.S. and EU to accept that in this business, some state aid is necessary.

LAURIE PRICE: This is an inevitable part of the levels of investment that are required to develop large-scale transport aircraft in the 21st century.

He says that aid should, of course, be open and above board and restricted to similar levels on both sides of the pond.

CHIOTAKIS: Marketplace's Stephen Beard reporting from London. Stephen, thanks.

BEARD: OK Steve.

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