. /.  WORLD TRADE  
ORGANIZATION   
WT/DS316/18 
12 December 2011 
 
 (11-6463) 
 Original:   English 
  
 
EUROPEAN COMMUNITIES AND CERTAIN MEMBER STATES –  
MEASURES AFFECTING TRADE IN LARGE CIVIL AIRCRAFT 
 
Recourse to Article 7.9 of the SCM Agreement and  
Article 22.2 of the DSU by the United States 
  
 The following communication, dated 9 December 2011, from the delegation of the 
United States to the Chairperson of the Dispute Settl ement Body, is circulated pursuant to Article 7.9 
of the SCM Agreement and Article 22.2 of the DSU.  
_______________ 
 
 
 The United States considers that the European  Union ("EU") and France, Germany, Spain, 
and the United Kingdom ("certain member States") have failed to comply with the recommendations and rulings of the Dispute Settleme nt Body ("DSB") in the dispute European Communities and 
Certain Member States – Measures Affecting Trade in Large Civil Aircraft  (DS316) (" EC – Large 
Civil Aircraft" ).  Pursuant to Article 22.2 of the Understanding on Rules and Procedures Governing 
the Settlement of Disputes  ("DSU") and Article 7.9 of the Agreement on Subsidies and Countervailing 
Measures  ("SCM Agreement"), the United States requ ests authorization from the Dispute Settlement 
Body ("DSB") to take countermeasures with respect to the European Union ("EU") at an annual level 
commensurate with the degree and nature of the adverse effects caused to the interests of the 
United States by the failure of the EU and certain member States to withdraw subsidies or remove their adverse effects in compliance with the reco mmendations and rulings of the DSB.  This amount 
corresponds to the annual value of lost sales, of imports of US large civil aircraft
1 displaced from the 
EU market, and of exports of US large civil airc raft displaced from third country markets.  The 
amount will be updated annually using the most rece nt publicly available data.  Based on currently 
available data in a recent period, the United St ates estimates this figure to be between $7 and 
$10 billion per year. 
 On 20 July 2005, the DSB established a panel at  the request of the United States to examine 
measures by the European Union and certain member States affecting trade in large civil aircraft.   
The panel found that the EU and certain member St ates were providing subsidies inconsistent with 
their obligations under the SCM Agreement.  On 1 June 2011, the DSB adopted its recommendations 
in EC – Large Civil Aircraft . The DSB recommendations and rulings include, inter alia , the 
recommendation that the Member granting each subs idy found to have resulted in such adverse 
effects bring the subsidy into compliance w ith its obligations under the SCM Agreement.2 
 Under Article 7.9 of the SCM Agreement, the EU and certain member States had six months 
from the date of adoption of the recommendation and ru lings of the DSB to withdraw the subsidies or 
take appropriate steps to remove the adverse effects of  the subsidies.  In the view of the United States, 
                                                      
1 Terms used in this request have the same m eaning as in the reports adopted by the DSB. 
2 WT/DS316/AB/R, para. 1418; WT/DS316/R, paras. 8.6 and 8.7. WT/DS316/18 
Page 2  
 
  the EU and certain member States failed to comply  with the recommendations and rulings of the DSB 
within that period.  The parties have not reached  agreement on compensation.  Therefore, the United 
States is entitled to authorization by the DSB to  take countermeasures under Article 22 of the DSU 
and Article 7.9 of the SCM Agreement. 
 In considering what countermeasures to take , the United States followed the principles and 
procedures set forth in Article 22.3 of the DSU.  As required by Article 7.9 of the SCM Agreement, 
the countermeasures are commensurate on an annual basis with the degree and nature of the adverse 
effects determined to exist.  The United States consid ers that it is neither practicable nor effective to 
suspend concessions or other obligations on imports  of EU goods up to a value of approximately 
US $10 billion.  The United States also considers that, given the degree and nature of the adverse 
effects, the circumstances are "serious enough" with in the meaning of Article 22.3(c) of the DSU.  
Therefore, the United States may suspend concessions or other obligations under the General 
Agreement on Trade in Services.  
 The countermeasures would consist of one or more of the following: 
 
(1) suspension of tariff concessions and re lated obligations (including most-favored-
nation obligations) under the General Agreement on Tariffs and Trade 1994  on a list 
of products of the EU and certain member States to be drawn from the Harmonized Tariff Schedule of the United States; and 
(2) suspension of horizontal or sectoral conc essions and obligations contained in the US 
Schedule of Specific Commitments with rega rd to all services defined in the Services 
Sectoral Classification List, except for financial services (sector 7). 
 The United States is requesting that a meeti ng of the Dispute Settlement Body be convened 
on 22 December 2011, to consider this matter.  
 
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