‘The US won a $7.5 Billion award from the World Trade Organization against the European Union, who has for many years treated the USA very badly on Trade due to Tariffs, Trade Barriers, and more. This case going on for years, a nice victory’, tweeted President Trump on 3 October 2019. The United States (US) won not only the highest amount of retaliation ever adjudicated in the history of the WTO but also an ongoing right to retaliate on an annual basis until such time as the EU had complied by either removing the subsidies it granted Airbus or somehow neutralizing their adverse effects on Boeing. In light of the facts of the case, this ruling has two major shortcomings. First, in sharp contrast with the statutory language and practice until now, the Arbitrator effectively introduced a permanent liability rule into the WTO system through the backdoor. Second, given the way the decision and the associated award has been written, it is simply impossible for the EU to comply because (a) the contested subsidies are no longer in existence and (b) no guidance has been provided on how the EU might go about removing their adverse effects on Boeing if it sought to achieve compliance. Thus, in all likelihood, the EU is saddled with a ruling that obligates it to cough up an annual sum of $7.5 billion USD for an indefinite time period.

The WTO concluded in 2012 that subsidized aeronautical research and development (R&D) gave Boeing a head start in product development that caused serious prejudice to the interests of Airbus but later, in 2019, it could not decide how long that head start had lasted. Meanwhile, the WTO concluded in 2018 that launch aid for Airbus aircraft led to innovations that also improved later aircraft models, thereby contributing to serious prejudice to the interests of Boeing. Both conclusions relied on a causation analysis that considered the effects of technological innovation, which makes subsidies used for R&D particularly vulnerable to challenge. This novel analysis may be too broad for the actionable subsidy disciplines of the SCM Agreement.

The 150th anniversary of the Royal Aeronautical Society offers an ideal opportunity to reflect on the spirit of innovation and collaboration fostered by the Society and its members over the past century and a half. Dr Jean Botti, an engineer with 31 patents to his name and Chief Technical Officer at Airbus Group, reflects on key innovation milestones for both Airbus Group and the industry as a whole. He also discusses the benefits of collaboration between the RAeS members and industry, and looks forward to an exciting new era of discovery – from electric flight (e-flight) to ‘smarter skies’ and the future development of new modes of flight which can only be imagined today.