Abstract
Making Sense of the Arbitrator’s Ruling in DS 316 EC and Certain Member States- Measures Affecting Trade in Large Civil Aircraft (Article 22.6-EC) A Jigsaw Puzzle with (at Least) a Couple Missing Pieces
Highlights
Airbus and Boeing have been, and continue to be, a duopoly in wide bodied aircrafts ever since Airbus entered the market on the basis of generous subsidies provided by several European nations
The Airbus-Boeing saga is fifteen years old its first tangible legal outcome saw the light of day only recently: the Arbitrator awarded the US an authorization to retaliate for the unprecedented amount of almost $7.5 billion, which it can impose annually, until the European Union (EU) has withdrawn subsidies it provided Airbus and/or removed all of their adverse effects on Boeing
Arbitrator decided that two separate launch aid (LA)/MSF15 subsidy schemes applicable to two specific planes (AX350XWB and A380XWB) had not been removed and were inconsistent with the EU’s obligations
Summary
The statutory language detailing the Arbitrator’s task is set out in Article 22.7 of DSU. The Arbitrator in EC–Bananas III (Article 22.6–EC) held that the purpose of retaliation is to induce compliance (§6.3). It cannot though, in the name of inducing compliance run afoul of Article 22.4 of DSU. In the name of inducing compliance run afoul of Article 22.4 of DSU When it comes to calculating the level of retaliation, its Article 22.4 of DSU, and not its potential persuasive effect to implement, that matters.. As Anderson (2002), one of the Arbitrators in this case explained, the review of compliance with Article 22.3 was rather minimal. It makes sense because of a clear precedent: in US-COOL (Article 22.6-US), the Arbitrators came up. Making Sense of the Arbitrator’s Ruling in DS 316 EC and Certain Member States- Measures Affecting Trade in Large with a comprehensive formulation to this effect, which, with very minor changes (mostly, of linguistic nature) has been reproduced in every report ever since
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