The World Trade Organization's appeal body has today overturned part of its ruling on Washington's complaint against the European Union over aid for aviation giant Airbus.
While the appellate body upheld findings that some subsidies provided by Brussels 'have caused serious prejudice to the interests of the United States', it reversed a key finding that financing by Germany, Spain and Britain for the development of the A380 superjumbo amounted to a export subsidy.
'As a consequence, the appellate body reversed the panel's recommendation that the European Union withdraw prohibited subsidies within 90 days,' the WTO said on its website.
EU trade commissioner Karel De Gucht hailed the finding, saying that he was 'particularly pleased with this important result'.
'The US central claim that Airbus received prohibited export subsidies has been dismissed in its entirety,' Mr De Gucht said ahead of six-month negotiations on redress over other aspects of the case.
Airbus also claimed victory, with Airbus chief executive Tom Enders proclaiming: 'This is a big win for Europe.'
However, both Washington and Boeing downplayed the finding.
Boeing described the appeals ruling as a 'clear, final win for fair trade'.
US Trade Representative Ron Kirk also noted that the appeals body 'confirmed without a doubt that Airbus received massive subsidies for more than 40 years and that these subsidies have greatly harmed the United States, including causing Boeing to lose sales and market share in key markets throughout the world'.
Mr Kirk claimed that the overturned finding amounted to a small fraction of the illegal subsidies.
'While it revised the underlying findings for the United States from $20 billion to $18 billion, the message in the Appellate Body report is clear - launch aid is illegal and the European Union and the member states should refrain from future launch aid disbursements,' he stressed.
