World Trade Organization (WTO) appeals judges are expected to hand down a long-anticipated decision on the dispute between the US and European Union (EU) over whether EU payments to Airbus constitute illegal subsidies.

The ruling caps a 14-year period of litigation that saw Airbus file its own complaint with the WTO countering that Boeing receives illegal subsidies from the US government and the state of Washington.

Airbus and Boeing have been filing cases against each other at the WTO since 2004. In 2010, the WTO ruled against Airbus, finding the $22 billion the aircraft manufacturer received in launch aid was illegal, and ordered Airbus and the EU to redress the situation. After failing to take any corrective action, the WTO in 2016 reaffirmed its decision, which Airbus appealed.

A decision against Airbus could potentially lead to the application of tariffs on certain imports from the EU, a move that would be in line with the Trump Administration’s penchant for protectionist trade measures.

The case centers on allegations that the EU improperly subsidizes Airbus through launch aids, which are taxpayer-funded payments from the governments of France, Germany and Spain and the UK to Airbus for the purpose of sponsoring new aircraft models.

Airbus claims the loans are fully repayable, although it does not have to begin payments until after deliveries of aircraft have commenced, and at below-market interest rates. Airbus does not have to repay loans on some aircraft that fail to reach a certain sales threshold.

The US government alleges Airbus’ launch aids have caused tens of billions of dollars of economic harm to the US aviation industry, in addition to lost jobs and market share.

The EU’s retaliatory case accuses the US government of providing indirect subsidies to Boeing worth $23 billion. The charges concern NASA and US Defense Department (DOD) contracts with Boeing for research and development projects, as well as federal, state and local tax breaks and government support for infrastructure used by the airplane manufacturer.

Washington counters that the NASA and DOD contracts were payments for research projects undertaken for public benefit, and claims the results were widely shared among many parties. On the issue of tax breaks, the US government contends the federal tax break for US exports has been eliminated, and the state and local tax breaks are common tools that comply with WTO rules.

The WTO, in a statement issued May 4, said it expects to make the ruling public by May 15. The decision in the case against Washington will follow the Airbus verdict by several months.

Ben Goldstein,