EU Contests Washington State Tax Breaks for Boeing at WTO
The European Union is challenging Washington State tax breaks for large aircraft manufacturers at the World Trade Organization over local content requirements it says violate global trade rules. The EU initiated the dispute process in recent days by asking for talks with the U.S. (here). The EU will be able to ask for a formal panel in 60 days if the two sides don't reach a compromise.
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Democratic Washington Governor Jay Inslee signed a tax break package in November 2013 that was meant to ensure Boeing manufacturing will continue in the state, Inslee’s office said (here). The breaks aim to keep Boeing’s 777X assembly and wing assembly in the state, the governor’s office said. Boeing will lose its business and operation tax rate for the 777X if work on the aircraft and wing assemblies is completed out of Washington State, said Inslee’s office. The EU says that the WTO Agreement on Subsidies and Countervailing Measures prohibits that local content requirement. The U.S. and EU have sparred in recent years over support measures for both Boeing and its primary European competitor Airbus (see 12031306).