WORLD TRADE  
ORGANIZATION   
WT/DS353/18 
12 October 2012  
 
(12-5593) 
 Original:   English 
  
 
UNITED STATES – MEASURES AFFECTING TRADE  
IN LARGE CIVIL AIRCRAFT 
(SECOND COMPLAINT) 
 
Recourse to Article 21.5 of the DSU by the European Union 
 
Request for the Establishment of a Panel 
 
  The following communication, dated 11 October 2012, from the delegation of the European 
Union to the Chairperson of the Dispute Settlement Bo dy, is circulated pursuant to Article 21.5 of the 
DSU.  
_______________ 
 
 
1. On 25 September 2012, the European Union reque sted consultations with the United States 
(US) with respect to dispute WT/DS353, United States – Measures Affecting Trade in Large Civil 
Aircraft (Second Complaint)  (US – Large Civil Aircraft ). The request was circulated in document 
WT/DS353/16 on 2 October 2012.  The European Un ion requested these consultations pursuant to 
Articles 4 and 21.5 of the Understanding on Rules and Procedures Governing the Settlement of 
Disputes  (DSU ); Article XXIII:1 of the General Agreement on Tariffs and Trade 1994 ( GATT 1994 ); 
Articles 4.1, 7.1 and 30 of the Agreement on Subsidies and Countervailing Measures  (SCM 
Agreement ), to the extent that Article 30 incorporates Article XXIII of the GATT 1994 ; and the 
"Agreed Procedures under Articles 21 and 22 of the Dispute Settlement Understanding and Article 7 
of the SCM Agreement " concluded by the European Union and th e United States with respect to this 
dispute on 12 January 2012 (Sequencing Agreement).
1   
2. Consultations were held on 10 October 2012, pursuant to each of the above-referenced 
provisions, with a view to reaching a mutually satisf actory solution.  The consultations failed to settle 
the dispute. 
3. Accordingly, "there is a disagreement as to the existence or consistency with a covered 
agreement of measures taken to comply with the recommendations and rulings" of the Dispute 
Settlement Body (DSB), within the meaning of Article 21.5 of the DSU .  The European Union hereby 
requests the establishment of a panel, pursuant to Articles 6 and 21.5 of the DSU , Article XXIII:2 of 
the GATT 1994 ; Articles 4.4, 7.4 and 30 of the Agreement on Subsidies and Countervailing Measures  
(SCM Agreement ), to the extent that Article 30 incorporates Article XXIII of the GATT 1994 ; and the 
Sequencing Agreement.   
4. On 23 March 2012, the DSB adopted the Appella te Body Report and the Panel Report (as 
modified) in US – Large Civil Aircraft , which found that US federal, state and local governments 
                                                      
1 WT/DS353/14, 27 April 2012, United States – Measures Affecting Trade in Large Civil Aircraft 
(Second Complaint) , Understanding between the European Union and the United States Regarding Procedures 
under Articles 21 and 22 of the DSU,  concluded 12 January 2012. WT/DS353/18 
Page 2  
 
  provide subsidies to US producers of large civil aircraft (LCA) – specifically, the Boeing Company 
(Boeing) – that are inconsistent  with US obligations under the SCM Agreement .  In particular, the 
DSB ruled that the following are specific subsidies,  within the meaning of Articles 1 and 2 of the 
SCM Agreement , that cause adverse effects, in the form of  serious prejudice, or threat thereof, to 
European Union (EU) interests, within the meaning of Articles 5(c) and 6.3(b) and (c) of that same 
Agreement : 
 Payments and access to government faciliti es, equipment, and employees under National 
Aeronautics and Space Administration (NASA) aeronautics research & development (R&D) programs; 
 Payments and access to facilities under US Depa rtment of Defense (DoD) aeronautics R&D 
programs; 
 Tax exemptions under Foreign Sales Corpora tion/Extraterritorial Income (FSC/ETI) 
legislation and successor acts; 
 Washington State business and occupati on (B&O) tax rate reductions; and, 
 Tax exemptions related to Industrial Revenue Bonds (IRBs) issued by the City of Wichita, 
Kansas. 
5. The DSB recommended that the United States take appropriate steps to remove the adverse 
effects or withdraw the subsidies.
2  Under Article 7.9 of the SCM Agreement , the United States had 
until 24 September 2012 to comply with the DSB’s recommendations.  The DSB also ruled that the 
United States provides subsidies to Boeing that are prohibited by the SCM Agreement , and recalled 
that prior recommendations of the DSB with resp ect to this matter continue to be operative.3 
6. By communication dated 23 September 2012, the United States notified the European Union 
that the United States has taken a number of actions allegedly withdrawing the subsidies or removing 
their adverse effects (23 September 2012 notification).    The actions and events listed by the United 
States in its 23 September 2012 notification do not withdraw the subsidies or remove their adverse 
effects, as required by Articles 4.7 and 7.8 of the SCM Agreement .  Instead, after the end of the 
implementation period on 24 September 2012, the Un ited States maintains specific subsidies that 
cause present adverse effects to EU  interests, that are prohibited subsidies contingent on export 
performance or on the use of domestic over imported goods, and that are inconsistent with the United 
States’ national treatment obligations, as detailed below in Section II.  Accordingly, in the view of the 
European Union, the United States has failed to  achieve compliance with the recommendations and 
rulings of the DSB.  
I. MEASURES 
7. The 23 September 2012 notification, as well as other available information, indicates that, 
after the end of the implementation period on 24 September 2012, the United States maintains billions 
of dollars of subsidies, within the meaning of Article 1.1 of the SCM Agreement , including both those 
subsidies that the DSB ruled to be specific subs idies causing adverse eff ects, as well as additional 
subsidies that constitute "measures taken to comp ly", within the meaning of Article 21.5 of the DSU .  
These subsidies, listed below, cause present adverse effects, in the form of serious prejudice, and a threat thereof, are prohibited, and are inconsiste nt with national treatment obligations, as detailed 
further in Section II below.
4   
                                                      
2 Minutes, DSB Meeting of 23 March 2012, WT/DSB/M/313, para. 79. 
3 Panel Report, US – Large Civil Aircraft (Second Complaint) , particularly Section VIII. 
4 The NASA and DoD programs and program elements listed below should be understood to include 
all NASA or DoD R&D programs and program elements included within the meanings of such terms as used by  WT/DS353/18 
 Page 3 
 
 
  A NASA  R&D  SUBSIDIES   
8. Through the following programs (as reflected in NASA’s annual Budget Estimates for Fiscal 
Years 1989 through 2013),5 as well as through contracts, assistance  instruments, and other agreements 
(as modified) entered into under these programs, NAS A maintains subsidies that presently benefit US 
LCA producers by providing Boeing with funding and access to government facilities, equipment, and 
employees for R&D applicable to the developmen t, design, and production of LCA, as well as by 
providing Boeing with royalty-free use of the tec hnologies developed with such funding and support 
or use of such technologies on preferential terms:  
 Advanced Composites Technology; 
 High Speed Research; 
 Advanced Subsonic Technology; 
 High Performance Computing and Communications; 
 Aviation Safety Program; 
 Quiet Aircraft Technology; 
 Vehicle Systems;  
 Research and Technology Base; 
 Fundamental Aeronautics; 
 Integrated Systems Research Program; 
 Aeronautics Strategy and Management; 
 Aeronautics Test Program; 
 High-End Computing Program;6 and, 
 Strategic Capabilities Assets Program.7 
9. To the extent that they were not entered in to pursuant to the programs listed above, NASA 
also maintains its subsidies by entering into a nd following the terms of the contracts and other 
agreements (as modified) with Boeing listed in Annex A of the United States’ 23 September 2012 
notification.  Annex A of the 23 September 2012 notif ication is attached to this request, and the 
contracts listed therein are incorporated into this request.  
10. Through these NASA programs, contracts, a nd other agreements, the US Government 
provides financial contributions within the mean ing of Article 1.1(a)(1)(i)-(iii) on terms more 
favourable than would be available on the commerc ial market, which provide a benefit within the 
meaning of Article 1.1(b).  These subsidies are specif ic within the meaning of Articles 1.2, 2.1, and 
2.3 of the SCM Agreement . 
                                                                                                                                                                     
the European Union before the Original Panel in DS353, regardless of any prior or subsequent changes in titles, 
budgetary codes, or organizational structure.   
5 See http://www.nasa.gov/news/budget/index.html; see also  Panel Report, US – Large Civil Aircraft 
(Second Complaint) , Section VII.D.5. 
6 See http://www.hec.nasa.gov/index.html (including the High-End Computing Capability project, see 
http://www.nas.nasa.gov/hecc/); see also,  e.g., NASA Budget Estimates for FY 2013, at ES-2, 6 (Earth Sciences 
Account, Computing and Management Program). 
7 See, e.g. , NASA Budget Estimates for FY 2013, at CAS-28 (Cross-Agency Support Account);  
http://scap.hq.nasa.gov/. WT/DS353/18 
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  B D
EPARTMENT OF DEFENSE R&D  SUBSIDIES  
11. Through the DoD Research, Development, Test, and Evaluation (RDT&E) Program,  as well 
as through contracts, assistance instruments, and othe r agreements (as modified) entered into under  
this program, the US DoD maintains subsidies that  presently benefit US LCA producers by providing 
Boeing with funding and access to government facilities, equipment, and employees for R&D 
applicable to the development, design, and produc tion of LCA on terms more favourable than would 
be available on the commercial market, as well as by providing Boeing with royalty-free use of the 
technologies developed with such funding and supp ort or use of such technologies on preferential 
terms.  The RDT&E Program, and the content thereof, is reflected in the annual DOD RDT&E 
Program Budget Justifications (Exhibits R-2) for Fiscal Years 1991 through 2013.8 
12. In addition, through the following US Air Fo rce, Navy, Army, and Defense-Wide program 
elements (PEs) of the RDT&E Program, as well as through contracts, assistance instruments, and 
other agreements (as modified) entered into unde r these PEs, the US DoD maintains subsidies that 
presently benefit US LCA producers by providing Boeing with funding and access to government 
facilities, equipment, and employees for R&D applic able to the development, design, and production 
of LCA on terms more favourable than would be  available on the commercial market, as well as by 
providing Boeing with royalty-free use of the tec hnologies developed with such funding and support 
or use of such technologies on preferential terms: 
 A-6 Squadrons (PE 0204134N); 
 Advanced Materials for Weapons Systems (PE 0603112F); 
 Aerospace Avionics/Aerospace Sensors (PE 0602204F); 
 Aerospace Flight Dynamics/Aerospace Vehicle Technologies (PE 0602201F); 
 Aerospace Propulsion (PE 0602203F); 
 Aerospace Propulsion and Power Technology (PE 0603216F); 
 Aerospace Structures/Aerospace Technology Dev/Demo (PE 0603211F); 
 Airborne Warning and Control System (AWACS) (PE 0207417F); 
 Aviation Safety Technologies (PE 0606301D8Z); 
 Aviation Survivability (PE 0603216N);  
 AV-8B Aircraft (PE 0604214N); 
 B-2 Advanced Technology Bomber (PE 0604240F); 
 C-17 (PE 0401130F and PE 0604231F); 
 Comanche (PE 0604223A); 
 CV-22 (PE 0401318F); 
 Defense Research Sciences (PE 0601102F); 
 Dual Use Applications/Dual Use Scienc e & Technology Program (PE 0602805F); 
 F/A-18 Squadrons (PE 0204136N); 
                                                      
8 See http://www.saffm.hq.af.mil /budget/ (Air Force); 
http://www.finance.hq.navy.mil/ FMB/13pres/BOOKS.htm (Navy); 
http://asafm.army.mil/offices/BU/BudgetMat.aspx (Army); 
http://comptroller.defense.gov/defbudget/fy2013/budge t_justification/index.html (Defense Wide); see also 
Panel Report, US – Large Civil Aircraft (Second Complaint) , Section VII.D.6.  WT/DS353/18 
 Page 5 
 
 
   F-22 (PE 0604239F); 
 Flight Vehicle Technology (PE 0603205F); 
 Flight Vehicle Technology Integration (PE 0603245F); 
 KC-10S (PE 0401219F); 
 KC-46, Next Generation Aerial Re fueling Aircraft (PE 0605221F);  
 Joint Strike Fighter (PE 0603800F, PE 0603800N, PE 0603800E, PE 0604800F, and PE 
0604800N); 
 Long Range Strike Bomber (PE 0604015F); 
 Manufacturing Technology/Industrial Preparedn ess Program9 (Air Force (PE 0603771F  and 
PE 0708011F); Navy (PE 0708011N); Defense Lo gistics Agency (PE 0708011S); Defense 
Wide Manufacturing Science a nd Technology (PE 0603680D8Z)) 
 Materials (PE 0602102F); 
 Materials and Biological Technology (PE 0602715E); 
 Multi-Mission Maritime Aircraft (P-8A) (PE 0605500N); 
 RDT&E for Aging Aircraft (PE 0605011F); 
 Sustainment Science & Technology (PE 0603199F); 
 Technology Transfer (PE 0604317F); 
 Technology Transition (PE 0604858F); and  
 V-22 (PE 0604262N).  
13. To the extent that they were not entered into  pursuant to the programs listed above, DoD also 
maintains its subsidies to US LCA producers by enteri ng into and following the terms of the contracts 
and other agreements (as modified) with Boeing lis ted in Annex B of the United States’ 23 September 
2012 notification.  Annex B of the 23 September 2012 notification is attached to this request, and the 
contracts listed therein are incorporated into this request. 
14. Through these DoD programs, contracts, and ot her agreements, the US Government provides 
financial contributions within the meaning of Artic le 1.1(a)(1)(i)-(iii) on terms more favourable than 
would be available on the commercial market, wh ich provide a benefit within the meaning of 
Article 1.1(b).  These subsidies are specific within the meaning of Articles 1. 2, 2.1, and 2.3 of the 
SCM Agreement . 
C FEDERAL AVIATION ADMINISTRATION R&D  SUBSIDIES  
15. Through the Continuous Lower Emissions, Energy, and Noise (CLEEN) program,10 the US 
Federal Aviation Administration (FAA), in colla boration with NASA, maintains subsidies that 
presently benefit US LCA producers.  Specifically , through the CLEEN program, the FAA provides 
Boeing with funding and access to government facilities, equipment, and employees for R&D applicable to the development, design, and produc tion of LCA, as well as by providing Boeing with 
royalty-free use of the technologies developed with such funding and support, or use of such 
                                                      
9 Established pursuant to 10 U.S.C. § 2521.  All statutory citations herein refer to the provisions in 
force as of the date of this request in order to assist in identifying the precise measure, but are not intended to 
narrow the scope of the challenged measure as described by excluding earlier amended and other related statutory provisions. 
10 See 
http://www.faa.gov/about/office_org/headquarters_offi ces/apl/research/aircraf t_technology/cleen/. WT/DS353/18 
Page 6  
 
  technologies on preferential terms.  Such R&D support is authorized by 49 U.S.C. §§ 44501-44517, 
48102, and periodic reauthorization legislation. 
16.  Through the CLEEN program, the US Governme nt provides financial contributions within 
the meaning of Article 1.1(a)(1)(i)-(iii) on terms more favourable than would be available on the 
commercial market, which provide a benefit within th e meaning of Article 1.1(b).  These subsidies are 
specific within the meaning of Articles 1.2, 2.1, and 2.3 of the SCM Agreement . 
D W
ASHINGTON STATE AND LOCAL SUBSIDIES  
17. The State of Washington and its political s ubdivisions maintain the following subsidies 
presently benefiting Boeing:  
 State B&O tax rate reduction for manufacturers of commercial aircraft, codified at Revised 
Code of Washington (RCW) 82.04.260(11); 
 State B&O tax credits for preproduction/aerosp ace product development and property taxes, 
codified at RCW 82.04.4461, 4463;  
 State sales and use tax exemptions for computer  hardware, peripherals, and software, codified 
at RCW 82.08.975 and 82.12.975;  
 City of Everett B&O tax reductions, codified at Everett Municipal Code 3.24.50, and; 
 State B&O tax credits for leasehold excise taxe s on covered buildings and land, pursuant to 
RCW 82.04.4463, as amended by Section 10 of  House Bill 2466, 2006 Wash. Sess. Laws 
787. 
Through these measures, the State of Washington and its political subdivisions provide financial 
contributions within the meaning of Article 1.1(a)(1)(i)-(ii) of the SCM Agreement , that confer a 
benefit to Boeing within the meaning of Article 1.1(b) of the SCM Agreement .  These subsidies are 
specific within the meaning of Articles 1.2, 2.1, and 2.3 of the SCM Agreement . 
 18. In addition, the State of Washington and its political subdivisions maintain the following 
subsidies presently benefiting Boeing through the: 
 Establishment of a "Dreamlifter Operations Ce nter" at Paine Field by Snohomish County, 
Washington, as reflected in Snohomish County Council Motion 12-062; and, 
 Establishment of the "Joint Center for Aerosp ace Technology Innovation" to inter alia provide 
aerospace R&D-related funding, coordination, and training, codified at RCW Chapter 
28B.155. 
Through these measures, the State of Washington and its political subdivisions provide financial 
contributions within the meaning of Article 1.1(a)(1)(i)-(iii) of the SCM Agreement , that confer a 
benefit to Boeing within the meaning of Article 1.1(b) of the SCM Agreement .  These subsidies are 
specific within the meaning of Articles 1.2, 2.1, and 2.3 of the SCM Agreement . 
 E FSC/ETI
 LEGISLATION AND SUCCESSOR ACTS 
19. The United States maintains tax exemptions an d tax exclusions under FSC/ETI legislation 
and successor legislation presently benefiting Boeing, specifically, the FSC Repeal and 
Extraterritorial Income Exclusion Act of 2000 § 5,  Pub. L. No. 106-519, 114 Stat. 2423; the American 
Jobs Creation Act of 2004 § 101, Pub. L. No. 108-357, 118 Stat. 1418; and the Tax Increase 
Prevention and Reconciliation Act of  2005 § 513, Pub. L. No. 109-222, 120 Stat. 345.  The United 
States maintains such tax exemptions and exclusio ns in accordance with Internal Revenue Service  WT/DS353/18 
 Page 7 
 
 
  Office of the Chief Counsel Memorandum No. AM  2007-001, "Qualification for FSC benefits and 
ETI Exclusions", dated 26 December 2006. 
20. Through these measures, the United States provi des financial contributions within the 
meaning of Article 1.1(a)(1)(ii) of the SCM Agreement , that confer a benefit to Boeing within the 
meaning of Article 1.1(b) of the SCM Agreement .  These subsidies are specific within the meaning of 
Articles 1.2 and 2.3 of the SCM Agreement . 
F STATE OF KANSAS AND CITY OF WICHITA SUBSIDIES   
21. The State of Kansas and the City of Wichita maintain state and local property and sales tax 
abatements, pursuant to K.S.A. §§ 79-201a, 79-3606( d), and 79-3640, that presently benefit Boeing in 
relation to the issuance of IRBs, pursuant to K.S.A. § 12-1741, by the City of Wichita. 
22. Through these measures, the State of Kansas and the City of Wichita provide financial 
contributions within the meaning of Article 1.1(a)(1)(ii) of the SCM Agreement , that confer a benefit 
to Boeing within the meaning of Article 1.1(b) of the SCM Agreement .  These subsidies are specific 
within the meaning of Articles 1.2, 2.1, and 2.3 of the SCM Agreement . 
G SOUTH CAROLINA STATE AND LOCAL SUBSIDIES  
23. The State of South Carolina and its political subdivisions, including the County of Charleston, 
maintain various subsidies for Boeing related to  the production of LCA and LCA components at 
facilities in North Charleston, South Carolina, thr ough two sets of incentives:  (i) "Project Gemini" 
incentives, related primarily to the location, estab lishment, and operation of  an additional final 
assembly line for the 787 at the Charleston International Airport; and (ii) "Project Emerald" incentives, related to the location, establishment,  and operation of manufacturing facilities for 787 
fuselage components on the same site.    
i. Project Gemini-Related Subsidies 
24. South Carolina and its political subdivisions ma intain several subsidies related to Project 
Gemini presently benefitting Boeing: 
 Provision of a long-term lease of government-owned land at preferential rates, pursuant to a 
ground lease agreement between the Charl eston County Aviation Authority and South 
Carolina Public Railways, as amended, a nd a ground sublease agreement between South 
Carolina Public Railways and Boeing, as amende d, thereby providing a financial contribution 
within the meaning of Article 1.1(a)(1)(ii)-(iii) of the SCM Agreement;  
 Provision of facilities and infrastructure at the Charleston International Airport site, as 
provided for in the Project Gemini Agreem ent between Boeing and the State of South 
Carolina, dated 1 January 2010, funded th rough state general obligation bonds issued 
pursuant to Title 11, Chapter 41 of the S.C. Code, as amended by Section 5 of H3130, Act 
No. 124, 2009 S.C. Acts 1092 (H3130), and S.C. Code § 55-11-520, at no cost to Boeing, thereby providing a financial contribution within the meaning of Article 1.1(a)(1)(i) and (iii) 
of the SCM Agreement;   
 Exemptions from state sales and use taxes for aircraft fuel, computer equipment, and 
construction materials, establis hed by Sections 2, 3, and 4 of H3130, respectively, and 
codified at S.C. Code § 12-36-2120(9)(e) a nd (f), (65)(b), and (67), thereby providing a 
financial contribution within the meaning of Article 1.1(a)(1)(ii) of the SCM Agreement; 
 Reductions of state corporate income taxes through an income allocation and apportionment 
agreement, entered into pursuant to S.C. C ode § 12-6-2320(B), as amended by Section 1 of WT/DS353/18 
Page 8  
 
  H3130, thereby providing a financial contribution within the meaning of Article 1.1(a)(1)(ii) 
of the SCM Agreement; 
 The provision of corporate income tax credits, as provided for in S.C. Code § 12-6-
3360(E)(1), by virtue of designating the Boeing site in North Charleston as part of a business/industrial park jointly established a nd developed by Charleston County and Colleton 
County, South Carolina, thereby providing a fi nancial contribution within the meaning of 
Article 1.1(a)(1)(i)-(ii) of the SCM Agreement;  
 Property tax exemptions for Boeing’s Large Ca rgo Freighters, pursuant to S.C. Code § 12-37-
220(B)(33), as amended by Section 1 of H3482,  Act No. 45, 2009 S.C. Acts 763, thereby 
providing a financial contribution within the me aning of Article 1.1(a)(1)(ii) of the SCM 
Agreement; 
 Establishment of workforce recruitment, tr aining and development programs for Boeing, 
thereby providing a financial contribution within the meaning of Article 1.1(a)(1)(i) and (iii) 
of the SCM Agreement; and,  
 Property tax reductions under a fee-in-lieu-of  taxes agreement between Charleston County 
and Boeing, dated 1 December 2009, as authorized by Title 12, Chapter 44 of the S.C. Code, including the provision of special source cred its as provided for in such agreement, and 
authorized by S.C. Code § 4-1-175, thereby providing a financial contribution within the 
meaning of Article 1.1(a)(1)(i)-(ii) of the SCM Agreement. 
ii. Project Emerald-Related Subsidies  
25. South Carolina and its political subdivisions maintain the following subsidies related to 
Project Emerald presently benefitting Boeing: 
 Provision of a long-term lease of government-owned land at below-market rates, pursuant to a 
ground lease agreement between the Charl eston County Aviation Authority and South 
Carolina Public Railways, as amended, a nd a ground sublease agreement between South 
Carolina Public Railways and Boeing, as amende d, thereby providing a financial contribution 
within the meaning of Article 1.1(a)(1)(ii)-(iii) of the SCM Agreement;  
 Provision of facilities and infrastructure at the Charleston International Airport site, as 
provided for in the Project Emerald Confid ential Site Development Agreement, funded 
through state general obligation bonds issued pursuant to Title 11, Chapter 41 of the S.C. 
Code, at no cost to Boeing, thereby providing a financial contribution within the meaning of 
Article 1.1(a)(1)(i) and (iii) of the SCM Agreement; 
 The provision of corporate income tax credits, as provided for in S.C. Code § 12-6-
3360(E)(1), by virtue of designating the Project Emerald site at Charleston International Airport as part of a business/industrial park jointly established and developed by Charleston 
County and Colleton County, South Carolina, thereby providing a financial contribution 
within the meaning of Article 1.1(a)(1)(i)-(ii) of the SCM Agreement; and, 
 Property tax reductions under a fee-in-lieu-of  taxes agreement between Charleston County 
and Vought Aircraft Industries, Global Aerona utica, and Boeing, dated 19 December 2006, 
and assigned to Boeing on or about 10 February 2010, as authorized by Title 12, Chapter 44 
of the S.C. Code, and provided for in the Pr oject Emerald Confidential Site Development 
Agreement, including the provision of infr astructure credits as provided for in such 
agreement, and authorized by S.C. Code § 12-44-70, thereby providing a financial 
contribution within the meaning of Article 1.1(a)(1)(i)-(ii) of the SCM Agreement. 
26. Through all of these Project Gemini-related measures and Project Emerald-related measures, 
the United States provides financial contributions wi thin the meaning of Article 1.1(a)(1) of the SCM 
Agreement , that confer a benefit to Boeing within  the meaning of Article 1.1(b) of the SCM  WT/DS353/18 
 Page 9 
 
 
  Agreement .  These subsidies are specific within the meani ng of Articles 1.2, 2.1, 2.2, and 2.3 of the 
SCM Agreement . 
27. In addition to the measures specifically listed a bove in Section I of this request, the European 
Union also considers that any amendments, supplem ents, extensions, replacement measures, renewal 
measures, related measures, or implementi ng measures constitute specific subsidies. 
II. LEGAL BASIS 
28. The European Union considers that, after the end of the implementation period, the United 
States maintains a series of subsidies, w ithin the meaning of Article 1.1 of the SCM Agreement  
through each of the measures listed in Section I, a bove.  Each of those measures provides a financial 
contribution within the meaning of Article 1.1(a)(1 ), as detailed further in Section I, and confers a 
"benefit" within the meaning of Article 1.1(b) by  providing the financial contribution on terms more 
favourable than would be available on the commercia l market.  Those subsidi es are specific, within 
the meaning of Articles 1.2 and 2 of the SCM Agreement , as detailed further in Section I.  
29. Those specific subsidies presently benefit the development, production and sale of Boeing’s 
737NG, 737 Max, 747, 767, 777 and 787 families of LC A, as well as any other future derivatives of 
these LCA families, including of the 777.  Collec tively, and under the conditions of competition 
present in the LCA markets, the subsidies listed in items I.A to G cause present adverse effects, in the 
form of serious prejudice, and threat thereof, to EU interests, inconsistently with Articles 5(c), 6.3(a), 
6.3(b) and 6.3(c), including Articles 6.4 and 6.5, of the SCM Agreement .  The effects of those 
subsidies adversely impact sales, market shares  and prices of Airbus’ A320, A320neo, A330, 
A350XWB and A380 families of LCA.  Specifically, the subsidies cause present serious prejudice, or 
threat thereof, to EU interests, in the form of:  (i) displacement and impedanc e of EU imports into the 
United States, within the meaning of Article 6.3(a) of the SCM Agreement ; (ii) displacement and 
impedance of EU exports to other third country markets, within the meaning of Article 6.3(b) of the 
SCM Agreement  (including on the basis of Article 6.4 of the SCM Agreement ); and, (iii) significant 
price undercutting, price suppression, price depression, and lost sales, within the meaning of Article 
6.3(c) of the SCM Agreement  (including on the basis of Article 6.5 of the SCM Agreement ). 
30. In addition, the subsidies provided through the measures listed in items I.A to G are 
contingent, in law or in fact, on actual or an ticipated export performance, and accordingly, are 
inconsistent with Articles 3.1(a) (i ncluding footnote 4) and 3.2 of the SCM Agreement  
31. Moreover, the subsidy measures listed in items I.A to G are contingent, in law or in fact, on 
the use of domestic over imported goods, such that th ey are, accordingly, inconsistent with Articles 
3.1(b) and 3.2 of the SCM Agreement .   
32. Through those same measures listed in items  I.A to G above, the United States accords 
treatment less favourable to imported products than th at accorded to like products of US origin, in law 
or in fact, inconsistently with Articles III:4 of the GATT 1994 , and maintains internal quantitative 
regulations that require, directly or indirectly, that  specified amounts or proportions of products be 
supplied from domestic sources, in law or in f act, inconsistent with Article III:5 of the GATT 1994 . 
Moreover, the United States otherwise applies such re gulations in a manner contrary to the principles 
set forth in paragraph 1 of Artic le III, including the principle th at such laws, regulations and 
requirements and internal quantita tive regulations should not be a pplied to imported or domestic 
products so as to afford protec tion to domestic production.  
*                    *                    * 
 
33. The European Union asks that th is request for the establishment of a panel be placed on the 
agenda for the next meeting of the DSB, which is scheduled to take place on 23 October 2012.   WT/DS353/18 
Page 10  
 
  34. The European Union requests that the Panel be established in accordance with Articles 4.4 
and 7.4 of the SCM Agreement  and Article 21.5 of the DSU , and with the standard terms of reference 
set out in Article 7 of the DSU .  The European Union recalls that Article 21.5 of the DSU provides 
that this matter shall be decided through recourse to the DSU , including wherever possible resort to 
the original panel.  
35. The European Union further requests that the DS B, together with the establishment of the 
Panel, initiate the procedures provided in Annex V of the SCM Agreement , as required by paragraph 2 
of that Annex. The European Union recalls that the DSB "shall" initiate these procedures, as required 
by paragraph 2 of Annex V, and that such DSB acti on occurs automatically when there is a request for 
initiation of an Annex V procedure and the DSB esta blishes a panel,  as clarified by the Appellate 
Body in US – Large Civil Aircraft .
11 
36. The European Union would like to indicate, in conformity with paragr aphs 1 and 3 of Annex 
V, that the market considered rele vant by the European Union is a world market.  In order to obtain 
sufficiently representative data to resolve this dis pute while at the same time avoiding unnecessary 
burdens on other WTO Members, the European Un ion intends to address questions under the Annex 
V procedure to the United States and the following third-country Members: 
Australia; Bahrain; Brazil; Canada; Chin a; Chile; Egypt; Ethiopia; Hong Kong; 
Iceland; India; Indonesia; Japan; Jordan; Kenya; South Korea; Malaysia; Morocco; Mexico; New Zealand; Nigeria; Norway; Oman; Panama; Qatar; Russian Federation; Saudi Arabia; Singapore; Turkey; Ukraine; United Arab Emirates 
37. The European Union is initiating consultati ons with the United States concerning the 
designation of a facilitator (other than the Chairman  of the DSB) pursuant to paragraph 4 of Annex V 
of the SCM Agreement .  The European Union considers that there would not be any reason to object 
to a proposal to have resort to the original facilita tor in DS316 and DS317, if available.  On the date 
of circulation of this Request for Panel Establishm ent and Initiation of an Annex V Procedure, there is 
no agreement concerning the identity of a facilitator other than the Chairman of the DSB.  Should 
such agreement be forthcoming prior to the DSB meeting at which the Panel is established and the 
Annex V procedure initiated, the European Union intends to request that the DSB designate the 
agreed person as the Facilitator.  In the absence of such agreement, and if no other person is 
designated, the European Union recalls that, as th e representative of the DSB, the Chairman is 
responsible for discharging the function of facilitati ng an Annex V procedure until such time as that 
function is delegated through the DSB's designation of another individual as the Facilitator pursuant 
to paragraph 4 of Annex V.
12 
 
_______________ 
 
                                                      
11 Appellate Body Report, US – Large Civil Aircraft (Second Complaint) , paras. 508-549, particularly 
paras. 524, 532 and 549 (" … the first sentence of paragraph 2 of Annex V to the SCM Agreement  must be 
understood as requiring the DSB to take action, and th at such action occurs auto matically when there is a 
request for initiation of an Annex V procedure and the DSB establishes a panel."), ("The function assigned to 
the DSB under paragraph 2 of Annex V is executory in nature, and is automatically discharged by it once the 
two specified conditions precedent are fulfilled."), ("… we have interpreted paragraph 2 of Annex V to the SCM 
Agreement  to mean that the DSB's initiation of an inform ation-gathering procedure in a serious prejudice 
dispute occurs automatically provided that a request for such a procedure has been made and a panel 
established."). 
12 Appellate Body Report, US – Large Civil Aircraft (Second Complaint) , para. 521: ("… as the 
representative of the DSB, the Chairman  is in principle responsible for discharging the function of facilitating an 
Annex V procedure until such time as that function is  delegated through the DSB's designation of another 
individual as a facilitator pursuant to paragraph 4 of Annex V.").  WT/DS353/18 
 Page 11 
 
 
 
  
Annex A 
 
 NAS1-11668 
NAS1-15148 
NAS1-18862 NAS1-18889 NAS1-20546 NAS1-20090 
NAS1-20103 
NAS1-20267 NAS1-20268 NAS1-97040 NAS3-25965 
NAS3-27018 
NAS3-27238 NAS1-15325 NAS1-17145 NAS1-17147 NAS1-18027 
NAS1-18028 
NAS1-18037 NAS1-18377 NAS1-18378 NAS1-18574 
NAS1-18586 
NAS1-18762 NAS1-18763 NAS1-18954 NAS1-19060 NAS1-19184 
NAS1-19703 
NAS1-20014 NAS1-20095 NAS1-20096 NAS1-20275 NAS1-20341 
NAS1-20342 
NAS1-99150 NAS2-10955 NAS2-11250 NAS2-11485 
NAS2-11966 
NAS2-12393 NAS2-12876 NAS2-12913 NAS2-13070 
NAS2-13312 
NAS2-13625 NAS2-14181 NAS3-25421 NAS3-25454 NAS3-25796 
NNA06BC41C 
NAS2-14096 NAS2-14090 NAS2-14091 NCC1-388  
NAS1-19245 
NAS1-19345 NAS1-19349 NAS1-19360 NAS1-19568 NAS1-20013 
NAS1-20220 
NAS3-25446 NAS3-25963 NAS1-00086 NNL04AA11B E3104D 
L70828D 
L71159D L71310D L71543D NAS1-00106 
NAS1-01057 
NAS2-12468 NCC1-287 NCC1-343  NNL05AA36C 
NNL06AA63T 
NAS1-00092 NAS1-99070 NAS3-25447 NNL04AA29C NNL04AA30C 
NNL04AA36C 
NNL05AB29T NNA06BC41C NNA08BA33C NNA09DA56C 
NNC07CB38C 
NNC07CB76C NNC08CA47C NNC08CA70C NNC08CA81C NNC08CA88C 
NNC08CA93C 
NNC09CA32C NNC10AA02A NNC10AA03A NNC10BA05B NNC10CA40C 
NNC10CA40C 
NNC11CA12C NNC11CA20C NNC11QA17P NNC11VA99P 
NNC12CA05C 
NAS4-00041 NND07AA08B NND08AA66C NND11AG03C 
NND11AQ73C 
NNL09AB50T NNL10AC38T NNL06AA04B NNL06AG30P NNL07AA03A 
NNL07AA44C 
NNL07AA48C NNL07AA54C NNL08AA02B NNL08AA16B 
NNL10AA00B 
NNL10AA05B NAS2-01064 NND08AA04P NNL10AA05B WT/DS353/18 
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 F33615-95-2-5562 
F33615-96-2-5618 
N00019-96-H-0118 F33615-97-2-3220 F33615-97-2-3400 F33615-97-2-3407 
F33615-97-2-3805 
F33615-97-2-5153 DAAH10-98-2-0003 F33615-98-2-5113 F33615-98-3-5103  
F33615-98-3-5104 
N00014-98-3-0022  DAAH10-99-2-0003 F29601-99-2-0149 F33615-99-2-5100 F33615-99-2-5501 
N00014-99-3-0011 
N00014-99-3-0012 N00014-99-3-0017 F33615-00-2-1717 F33615-00-2-3000 
F33615-00-2-3002 Annex B 
 
F33615-00-2-5203 
F33615-00-2-5208 
F33615-00-2-5900 F49620-00-2-0384 MDA972-00-3-0007  N00014-00-3-0004  
N00014-00-3-0019  
N00421-00-3-0123 DAAH10-01-2-0005 F29601-01-2-0042 F29601-01-2-0045 
F33615-01-2-3101 
F33615-01-2-3110 F33615-01-2-3152 F33615-01-2-5204 F33615-01-2-5206 F33615-01-2-5213 
N00421-01-3-0098  
F04611-02-2-0003 F33615-02-2-3220 F33615-02-2-3251 F33615-02-2-6037 
DAAH10-03-2-0002 
     
 F33615-03-2-1403 
F33615-03-2-2306 
F33615-03-2-3300 F33615-03-2-3304 F33615-03-2-5201 F33615-03-2-5202 
F33615-03-2-6316 
F33615-03-2-6318 MDA972-03-2-0003 FA8650-04-2-3449 FA8650-04-2-5000 
W911NF-04-2-0039 
FA8650-05-2-3503 FA9550-05-2-0001 W911W6-05-2-0006 FA8650-08-2-3834 N00173-08-2-C009 
W991W6-08-2-0014 
HR0011-10-2-0001 FA8650-11-2-1187 FA8650-11-2-213 
 
 
 
 
  
 
  
__________