WT/DS353/28  
 
18 September  2017 
(17-4908) Page: 1/3 
  Original: English  
 
UNITED STATES – MEASURES AFFECTING T RADE IN LARGE CIVIL AIRCRAFT  
(SECOND COMPLAINT)  
RECOURSE TO ARTICLE 21.5 OF THE DSU BY T HE EUROPEAN UNION  
NOTIFICATION OF AN  OTHER  APPEAL BY THE UNITED STATES  UNDER ARTICLE 16.4 AND 
ARTICLE  17 OF THE UNDERSTAND ING ON RULES AND PRO CEDURES GOVERNING THE 
SETTLEMENT OF DISPUTES ( "DSU"), AND UNDER RULE 20(1)  OF THE WORKING PROCEDURES 
FOR APPELLATE REVIEW  
The following communication , dated 10 August  2017, from the delegation of the United States , is 
being circulated to Members.  
 
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Pursuant to Rule 23(1) of the Working Procedures for Appellate Review , the United States 
hereby notifies the Appellate Body of its decision to appeal certain issues of law covered in the 
Report of the Panel in United States – Measures Affecting Trade in Large Civil Aircraft 
(Second  Complaint):  Recourse to Article 21.5 of the DSU by the European Union (WT/DS353/RW) 
("Compliance Panel Report ") and certain legal interpretations developed by the Panel.  
 
1. The United States seeks review by the Appellate Body of the Panel 's finding that 
European  Union ( "EU") claims regarding procurement contracts between the U.S. Department of 
Defense ( "DoD") and The Boeing Company ( "Boeing ") were within its terms of reference.  This 
conclusion is in error and is based on erroneous findings of law and related legal interpretations, 
including an erroneous interpretation and application of Articles 6.2 and 21.5 of the Understanding 
on Rules and Procedures Governing the Settlement of Disputes  ("DSU"). The paragraphs relating 
to these errors include paragraphs 7.111 -7.131 and 11.5.a.ii of the Compliance Panel Report.  
2. The United States appeals the Panel 's finding regarding the approximate rate of 
subsidization per 737 MAX and 737NG, resu lting from the Washington State B&O tax rate 
reduction.  This finding is in error and is based on erroneous findings of law and related legal 
interpretations, including an erroneous interpretation or application of Articles 5(c) and 6.3(c) of 
the Agreement on Subsidies and Countervailing Measures  ("SCM Agreement "). In the alternative, 
the Panel failed to make an objective assessment of the matter before it, including an objective 
assessment of the facts of the case and the applicability and conformity with t he relevant covered 
agreements for purposes of Article 11 of the DSU.  The paragraphs relating to these errors include 
paragraphs 9.385, 9.395, and 9.402 -9.403 of the Compliance Panel Report.   
3. The United States appeals the Panel 's findings that the price di fference in the Air Canada 
sales campaign was somewhat smaller than the price difference in the Icelandair 2013 sales 
campaign, and that, in the concluding stages of the Air Canada 2013 sales campaign, Airbus 
thought it was close enough to Boeing on price that relatively small improvements on price could 
affect the outcome of the campaign.  The Panel failed to make an objective assessment of the 
matter before it, including an objective assessment of the facts of the case and the applicability 
and conformity with the relevant covered agreements for purposes of Article 11 of the DSU.  The 
paragraphs relating to these errors include paragraph 9.403 of the Compliance Panel Report and 
paragraph 264 of the HSBI Appendix to the Compliance Panel Report.  WT/DS353/28  
 
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  4. The United Sta tes appeals the Panel 's finding that the evidence regarding the price 
differential in the Icelandair 2013 sales campaign was somewhat contradicted by other evidence, 
which suggests that at the final stage, Airbus may have closed the gap.  The Panel failed t o make 
an objective assessment of the matter before it, including an objective assessment of the facts of 
the case and the applicability and conformity with the relevant covered agreements for purposes of 
Article 11 of the DSU.  The paragraphs relating to t hese errors include paragraph 9.403 of the 
Compliance Panel Report and paragraphs 247 and 250 of the HSBI Appendix to the Compliance 
Panel Report.  
5. The United States appeals the Panel 's finding that the European Union has established that 
the effects of the  Washington State B&O tax rate reduction are a genuine and substantial cause of 
significant lost sales within the meaning of Articles 5(c) and 6.3(c) of the SCM Agreement of 
A320neo and A320ceo families of LCA in the single -aisle LCA market, in respect of the sales 
campaigns for Fly Dubai in 2014, Air Canada in 2013, and Icelandair in 2013, in the 
post-implementation period.  This conclusion is in error and is based on erroneous findings of law 
and related legal interpretations, including an erroneous interp retation or application of 
Articles  5(c) and 6.3(c) of the SCM Agreement.  In addition, the Panel failed to make an objective 
assessment of the matter before it, including an objective assessment of the facts of the case and 
the applicability and conformity  with the relevant covered agreements for purposes of Article 11 of 
the DSU.  The paragraphs relating to these errors include paragraphs 9.385, 9.395, 9.402 -9.404, 
9.407, and 11.8(c) of the Compliance Panel Report.   
6. The United States appeals the Panel 's finding that the European Union has established that 
the effects of the Washington State B&O tax rate reduction are a genuine and substantial cause of 
a threat of impedance of imports of the A320ceo to the United States single -aisle market, and a 
threat of impedance of exports of Airbus single -aisle LCA in the United Arab Emirates third country 
market, within the meaning of Articles 5(c) and 6.3(a) and (b) of the SCM Agreement in the 
post-implementati on period.  This conclusion is in error and is based on erroneous findings of law 
and related legal interpretations, including an erroneous interpretation or application of 
Articles  5(c) and 6.3(c) of the SCM Agreement.  The paragraphs relating to these erro rs include 
paragraphs 9.385, 9.395, 9.402 -9.404, 9.438, 9.443, 9.444, and 11.8(d) of the Compliance Panel 
Report.  
7. The United States conditionally  appeals the Panel 's findings that post -2006 National 
Aeronautics and Space Administration ( "NASA ") procurement  contracts and cooperative 
agreements, DoD assistance instruments, and the Aviation Administration ( "FAA") Other 
Transaction Agreement DTFAWA -10-C-00030 conferred a benefit on Boeing.  These conclusions are 
in error and are based on erroneous findings of la w and related legal interpretations, including an 
erroneous interpretation and application of Article 1.1(b) of the SCM Agreement.  In addition, the 
Panel failed to make an objective assessment of the matter before it, including an objective 
assessment of t he facts of the case and the applicability and conformity with the relevant covered 
agreements for purposes of Article 11 of the DSU.  The paragraphs relating to these errors include 
paragraphs 8.30, 8.44 -8.50, 8.176 -8.178, 8.181 -8.187, 8.408 -8.414, 8.533 -8.541, and 
11.7(b)(i) -11.7(b)(iii) of the Compliance Panel Report.  The United States only requests the 
Appellate Body to address this issue if it modifies or reverses the Panel 's finding that subsidies 
conferred through the measures referenced in this parag raph did not cause adverse effects under 
Articles 5 and 6.3 of the SCM Agreement.  
8. The United States conditionally  appeals the Panel 's findings that subsidies conferred by the 
NASA, DoD, and FAA measures referenced in paragraph 2 were specific subsidies.  These 
conclusions are in error and are based on erroneous findings of law and related legal 
interpretations, including an erroneous interpretation and application of Article 2.1 of the 
SCM Agreement.  The paragraphs relating to these errors include paragraphs  8.210 -8.211, 
8.222 -8.231, 8.460 -8.469, 8.547, 8.548 -8.533, and 11.7(b)(i) -11.7(b)(iii) of the Compliance 
Panel Report.  The United States only requests the Appellate Body to address this issue if it finds 
that DoD procurement contracts create the same type  of financial contribution as the measures 
referenced in paragraph 2.  
9. The United States conditionally  appeals the Panel 's finding that the State of South Carolina 's 
payment to Boeing of $270 million in Economic Development Bond and Air Hub Bond proceeds, 
conferred a benefit to Boeing.  The Panel failed to make an objective assessment of the matter 
before it, including an objective assessment of the facts of the case and the applicability and WT/DS353/28  
 
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  conformity with the relevant covered agreements for purposes of Ar ticle 11 of the DSU.  The 
paragraphs relating to these errors include paragraphs 8.823, 8.849, and 11.7(b)(ix) of the 
Compliance Panel Report.  The United States only requests the Appellate Body to address this issue 
if it modifies or reverses the Panel 's finding that subsidies conferred through the measures 
referenced in this paragraph did not cause adverse effects under Articles 5 and 6.3 of the 
SCM Agreement.  
10. The United States conditionally appeals the Panel 's finding that the EU 's claim of A330 price 
suppression did not fail as a matter of law, despite that the EU failed to allege that the A330 is "in 
the same market " as an allegedly subsidized product.  This conclusion is in error and is based on 
erroneous findings of law and related legal interpretations, including an erroneous interpretation or 
application of Articles 5(c) and 6.3(c) of the SCM Agreement.  The portions of the compliance Panel 
report rela ting to these errors include footnote 3173. The United States only requests the 
Appellate Body to address this issue if it modifies or reverses Panel findings regarding the EU 's 
claim of adverse effects suffered by the A330.  
 
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