November 28, 2016
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WTO rules against successful Boeing tax incentives

After a World Trade Organization (WTO) ruling last September that found Airbus, the chief competitor of Boeing, received $22 billion in illegal government subsidies, the WTO rejected nearly every claim against Boeing today.

The European Union (EU) filed a complaint with the WTO regarding Boeing’s 2013 Washington state tax incentives, which were passed with a bipartisan majority in the Legislature and signed by Democratic Gov. Jay Inslee during a brief special session.

In WTO’s ruling today, it found the incentives “illegal,” but Boeing hailed the ruling, on this and many other EU complaints against the company, a victory.

"Today's decision is a complete victory for the United States, Washington State and Boeing," said J. Michael Luttig, Boeing's general counsel. "The WTO found in September that Airbus has received $22 billion in illegal subsidies from the EU and that without these subsidies neither Airbus itself nor any of its airplanes would even exist today. By contrast, in rejecting virtually every claim made by the EU in this case, the WTO found today that Boeing has not received a penny of impermissible subsidies."Luttig went on to say Boeing fully expects to “preserve every aspect of the Washington state incentives, including the 777X revenue tax rate.”

The Associated Press talked to Washington political leaders for their response to the ruling.

Gov. Jay Inslee said the tax incentives were the right thing to do for Washington three years ago, and still are. He said it's too early to say what the state might do in response to the action, since it is likely to be appealed.

Sen. Reuven Carlyle, who as a Democrat in the House sponsored the 2013 tax incentive bill, noted that the WTO "categorically rejected the overwhelming majority of the European Union's case," and that the part of the ruling related to Washington "is pretty modest compared to the central argument."

Republican Senate Majority Leader Mark Schoesler said Airbus complaints about subsidies are "the pot calling the kettle black."

"They're not receiving extremely favorable treatment? Hardly," he said.

For more information on the tax incentives and budget and tax issues, contact AWB Government Affairs Director Eric Lohnes at 360.943.1600.

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