WORLD TRADE  
ORGANIZATION   
WT/DS353/15 
26 September 2012  
 
(12-5164) 
 Original:   English 
  
 
UNITED STATES – MEASURES AFFECTING TRADE  
IN LARGE CIVIL AIRCRAFT  
(SECOND COMPLAINT) 
 
Communication from the United States 
   The following communication, dated 23 Sept ember 2012, from the delegation of the 
United States to the Chairperson of the Dispute Settle ment Body, is circulated at the request of that 
delegation. 
 
_______________ 
 
 
On behalf of the United States I am pleased to  provide the attached notification of the 
withdrawal of subsidies and removal of adverse effects in the dispute  United States – Measures 
Affecting Trade in Large Civil Aircraft (Second Complaint) (DS353).  Through the steps identified in 
the notification, the United States has fully comp lied with the recommendations and rulings of the 
Dispute Settlement Body in this dispute.    
We request that you please circulate the enclosed notification to the DSB. 
 
  WT/DS353/15 
Page 2  
 
  NOTIFICATION OF THE WITHDRAWAL OF SUBSIDIES  
AND REMOVAL OF ADVERSE EFFECTS IN  
UNITED STATES – MEASURES AFFECTING  
TRADE IN LARGE CIVIL AIRCRAFT  
(SECOND COMPLAINT) 
 
 
1. On March 23, 2012, the Dispute Settlement Body ("DSB") of the World Trade Organization 
("WTO") adopted its recommendations and rulings with respect to the dispute United States – 
Measures Affecting Trade in Large Civil Aircraft (Second Complaint)  (WT/DS353).  By that action, 
the DSB adopted findings that the United States caused adverse effects to the interests of the 
European Union ("EU") within the meaning of Article 5(c) of the Agreement on Subsidies and 
Countervailing Measures  ("SCM Agreement") through the use of certain subsidies, and  recommended 
that the United States "take appropriate steps to remove the adverse effects or . . . withdraw the 
subsidy."
1 
2. The United States, in consultation with the releva nt federal, state, and local authorities, has 
carefully considered the recommendations and rulings of  the DSB.  In light of  these and other relevant 
considerations, the United States has taken a number of actions to withdraw the subsidies found to 
have caused adverse effects or to remove their adverse effects. 
3. The National Aeronautics and Space Administration ("NASA") has modified the rights 
accorded to the parties under the contracts listed in  Annex A so as to make them consistent with 
commercial practice.  These modifications apply to all of the NASA contracts covered by the 
recommendations and rulings of the DSB.  NASA has made identical modifications, as necessary, with regard to contracts subsequent to those cove red by the recommendations and rulings of the DSB, 
without prejudice to the U.S. view that those cont racts were not subsidies causing adverse effects to 
EU interests.  These contracts are also listed in Annex A. 
4. NASA has terminated the Advanced Com posites Technology, High Speed Research, 
Advanced Subsonic Technology, High Performance Computing and Communications, Quiet Aircraft 
Technology, Vehicle Systems, and Research and Technology Base programs, and reduced funding for 
aeronautics research contracts with private partie s under other aeronautics research programs.  NASA 
has changed its policies so as to remove limitati ons on access to the results of NASA research and 
development efforts, including by ceasing the use of limited exclusive data rights ("LERD") clauses.  
NASA has implemented a policy of seeking greater prompt disclosure of the results of its sponsored 
research when it purchases research and de velopment services from private entities. 
5. The U.S. Department of Defense ("DoD") has modified the rights accorded to the parties 
under the cooperative agreements, t echnology investment agreements , and Other Transactions listed 
in Annex B so as to make them consistent with co mmercial practice.  The modifications apply to all 
of the DoD assistance instruments covered by th e recommendations and rulings of the DSB.  DoD 
made identical modifications with regard to contracts subsequent to those covered by the 
recommendations and rulings of the DSB, without prej udice to the U.S. view that those contracts were 
not subsidies causing adverse effects to EU interest s.  These contracts are also listed in Annex B.  
6. DoD has ceased funding of the following programs:  Dual Use Application and Dual Use 
Science and Technology (Program Element (" PE") 0602305F); Navy Manufacturing Technology 
("ManTech") (PE 0603771F); Air Force ManTech (PE 0708011F); Defense Advanced Research 
Projects Agency research on the Joint Strike Fighter (PE 0603800E); Army research related to the 
                                                      
1 United States – Measures Affecting Trade in Large Civil Aircraft (Second Complaint) , WT/DS353/R, 
para. 8.9.  WT/DS353/15 
 Page 3 
 
 
  Comanche (PE 0604223A); Air Force research on th e B-2 (PE 0604240F); and Air Force research on 
A-6 Squadrons (PE 0604240F). 
7. The United States enacted legislation termin ating the Foreign Sales Corporation and 
Extraterritorial Income ("FSC/ETI") tax benefits. 
8. The United States has confirmed that Boeing did not use FSC or ETI tax benefits after 2006. 
9. The State of Washington is applying rates of Business and Occupancy Tax ("B&O") for 
aerospace manufacturing and reta iling consistent with Article 5(c) of the SCM Agreement. 
10. The City of Wichita is applying its Industrial Revenue Bond ("IRB") program in a manner 
consistent with Article 5(c) of the SCM Agreemen t.  It has not provided any IRBs to Boeing since 
2007. 
11. In light of the conditions of competition in the ma rket for large civil aircraft and actions taken 
by the United States, any adverse effects of the su bsidies in question have ceased to exist, or a 
"genuine and substantial rela tionship of cause and effect"2 no longer exists between the subsidies 
subject to the recommendations and rulings of the DS B and any adverse effects within the meaning of 
Article 5(c) of the SCM Agreement. 
12.  Through these actions, the United States has w ithdrawn the subsidy or removed the adverse 
effects with respect to each of the subsidies found to be inconsistent with Article 5(c) of the SCM 
Agreement:  payments and access to facilities, equipment, and employees provided under NASA 
procurement contracts, payment and access to facilities provided pursuant to DoD assistance 
instruments, the FSC/ETI measures, B&O tax rate reductions, and IRB subsidies.  The United States notes that this holds true with regard to a ll of the Boeing aircraft covered by the DSB 
recommendations and rulings, namely the Boeing 737 and 787, as well as the Airbus aircraft with 
respect to which the adverse effects existed,  namely, the A320, A330, and Original A350. 
 
                                                      
2 United States – Measures Affecting Trade in Large Civil Aircraft (Second Complaint) , 
WT/DS353/AB/R, para. 913. WT/DS353/15 
Page 4  
 
 
  
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/DS353/15 
 Page 5 
 
 
 
   
 ANNEX B 
  
 
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 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 
FA8650-11-2-2138