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Jon Talton

Analysis and commentary on economic news, trends and issues, with an emphasis on Seattle and the Northwest.

September 23, 2016 at 9:08 AM

Vote: What does Boeing’s WTO victory mean?

The World Trade Organization was intended to be the fulfillment of the American-led, post-World War II liberal economic order, put in place to avoid some of the stresses that led to the rise of Hitler. All participants would play by the same rules, with ever lower tariffs and minimal subsidies.

So how should we feel about the WTO ruling that Airbus violated the rules by receiving subsidies to the detriment of Boeing?

U.S. Trade Representative Michael Froman called it “a sweeping victory,” adding, “will not tolerate our trading partners, even our closest trading partners, ignoring the rules at the expense of American workers.”

And while those are commendable sentiments, is an Obama or Clinton administration really prepared to set off a trade war, even though the WTO ruling theoretically gives the United States standing to impose billions of dollars in punitive tariffs on the EU?

First, it would do nothing to fix the harm done to aerospace workers or Boeing. Second, it would strain the trans-Atlantic relationship at a time of tension between NATO and Russia, as well as the troubles with the ISIS. Third, Airbus has slyly added Alabama to its ranks with a new assembly in Mobile (Sen. Richard Shelby is almost single-handedly holding up revival of the Ex-Im Bank).

The case has dragged on for 12 years  Airbus can appeal (again).  The European company has s smaller WTO complaint against Boeing. And these are supposedly the nations with the closest-aligned liberal values. We’re not talking about China.

So what do you think about the ruling?


Today’s Econ Haiku:

Dissent at the Fed

Does it rate our attention?

Or our interest?


Comments | More in Aerospace/Boeing, Economy

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