WORLD TRADE  
ORGANIZATION  WT/DS353/10 
29 April 2011 
 (11-2233) 
 Original:   English 
  
 
UNITED STATES – MEASURES AFFECTING TRADE  
IN LARGE CIVIL AIRCRAFT  
(SECOND COMPLAINT) 
 
Notification of an Other Appeal by the United States
  
under Article 16.4 and Article 17 of the Understanding on Rules   
and Procedures Governing the Settlement of Disputes (DSU),  
and under Rule 23(1) of the Working Procedures for Appellate Review  
  
 The following notification, dated 28 April 2011, from the Delegation of the United States, is 
being circulated to Members.  
_______________ 
 
 
 Pursuant to Rule 23(1) of the Working Procedures for Appellate Review , the United States 
hereby notifies its decision to appeal to the Appella te Body certain issues of law covered in the report 
of the Panel in United States – Measures Affecting Trade in  Large Civil Aircraft (Second Complaint) 
(WT/DS353/R) ("Panel Report") and certain legal in terpretations developed by the Panel in this 
dispute.  
1. The United States seeks review by the Appella te Body of the Panel's finding that payments 
made by the U.S. National Aeronautics and Sp ace Administration ("NASA") to The Boeing Company 
("Boeing") under contracts for the performance of ae ronautics research were a financial contribution.
1  
This finding is in error and is  based on erroneous findings on issues of law and related legal 
interpretations, including an incorrect inte rpretation of Article 1.1(a)(1)(i) of the Agreement on 
Subsidies and Countervailing Measures  ("SCM Agreement").  The United States also requests the 
Appellate Body to find that the Panel failed to ma ke "an objective assessment of the matter before it, 
including an objective assessment of the facts of th e case and the applicability of and conformity with 
the relevant covered agreements" as required by Article 11 of the Understanding on Rules and 
Procedures Governing the Settlement of Disputes  ("DSU") by disregarding evidence that research 
under the NASA-Boeing contracts was of benefit and use to the U.S. government and unrelated third 
parties.2  The United States also requests the Appella te Body to modify the Panel's erroneous 
approach to the legal issue of the scope of the term "services".3 
2. The United States seeks review by the Appella te Body of the Panel's finding that access to 
NASA facilities, equipment, and employees provided to Boeing through research contracts and agreements at issue constituted a provision of goods a nd services.  This finding is in error and is based 
on erroneous findings on issues of law and relate d legal interpretations, including an incorrect 
interpretation of Article 1.1(a)(1)(iii) of the SC M Agreement.  The United States also requests the 
                                                     
 
1Panel Report, para. 7.981. 
2Panel Report, paras. 7.1027 and 8.3. 
3Panel Report, para. 7.978. WT/DS353/10 
Page 2  
 
  Appellate Body to find that the Panel failed to "set out the findings of fact, the applicability of 
relevant provisions and the basi c rationale behind any findings and recommendations that it makes" as 
required by Article 12.7 of the DSU by providing no explanation for the findings referenced in this 
paragraph.
4   
3. The United States seeks review by the Appella te Body of the Panel's finding that payments 
made by NASA to Boeing under contracts for the performance of aeronautics research and facilities, 
equipment, and employees provided to Boeing through research contracts and agreements at issue conferred a benefit.  This finding is in error and is based on err oneous findings on issues of law and 
related legal interpretations, including an incorr ect interpretation of Article 1.1(b) of the 
SCM Agreement.
5   
4. The United States seeks review by the Appella te Body of the Panel's finding that payments 
made by the U.S. Department of Defense ("Do D") under certain agreemen ts were a financial 
contribution.  This finding is in error and is b ased on erroneous findings on issues of law and related 
legal interpretations, including an incorrect interpretation of Article 1.1(a)(1)(i) of the 
SCM Agreement.6   
5. The United States seeks review by the Appella te Body of the Panel's finding that access to 
DoD facilities provided to Boeing under certain ag reements constitutes a provision of goods or 
services.  This finding is in error and is based on e rroneous findings on issues of law and related legal 
interpretations, including an incorrect interpretati on of Article 1.1(a)(1)(iii) of the SCM Agreement.7 
6. The United States seeks review by the Appella te Body of the Panel's finding that payments 
and access to facilities under certain ag reements provided a benefit.  Th is finding is in error and is 
based on erroneous findings on issues of law and re lated legal interpretations, including an incorrect 
interpretation of Article 1. 1(b) of the SCM Agreement.8  The United States also requests the Appellate 
Body to find that the Panel failed to make "an obj ective assessment of the matter before it, including 
an objective assessment of the f acts of the case and the applicability of and conformity with the 
relevant covered agreements" as re quired by Article 11 of the DSU by concluding, without a basis in 
the evidence contained in the panel record, it "does not consider it cred ible that less than 1 per cent of 
the $45 billion in aeronautics R&D funding that  DOD provided to Boeing over the period 1991-2005 
had any potential relevance to LCA."9 
7. The United States seeks review by the Appellate  Body of the Panel's finding that reductions 
by the state of Washington in the rates of busin ess and occupancy tax ("B&O tax") applicable to the 
manufacture or making of sales, at retail or wholesale, of commercial aircraft were a financial 
contribution.  This finding is in error and is b ased on erroneous findings on issues of law and related 
legal interpretations, including an incorrect in terpretation of Article 1.1(a)(1)(ii) of the 
SCM Agreement.10 
8. The United States seeks review by the Appellate  Body of the Panel's finding that the B&O tax 
reductions granted to the aerospace industry by the stat e of Washington was specific.  This finding is 
                                                      
4Panel Report, paras. 7.1027 and 8.3. 
5Panel Report, paras. 7.1037-7.1040 and 8.3. 
6Panel Report, paras. 7.1171 and 8.3. 
7Panel Report, paras. 7.1171 and 8.3. 
8Panel Report, paras. 7.1185, 7.1187, and 8.3. 
9Panel Report, para. 7.1205.   
10Panel Report, paras. 7.133, 7.138, and 8.3. WT/DS353/10 
Page 3 
 
 
  in error and is based on erroneous findings on issues of law and related legal interpretations, including 
an incorrect interpretation of Article 2.1(a) of the SCM Agreement.11 
9. The United States seeks review by the Appellate  Body of the Panel's finding that Boeing and 
Spirit Aero Systems were granted a disproportion ately large amount of tax abatements available 
through industrial revenue bonds issued by the City of  Wichita.  This finding is in error and is based 
on erroneous findings on issues of law and relate d legal interpretations, including an incorrect 
interpretation of Article 2.1(c) of the SCM Agreement.12 
10. The United States seeks review by the Appellate Body of the Panel's finding that the effect of 
the aeronautics research and development subsidies conferred by NASA and DoD, as described in the 
Panel Report, is a threat of displacement or im pedance of exports of the European Union ("EU")13 
from third country markets, significant lost sales , and price suppression with respect to the 200-300 
seat wide-body large civil aircraft product market.14  In particular, the Panel erroneously found that an 
effect of the aeronautics research and development subsidies is: 
(a) significant lost sales within the meaning of Article 6.3(c) of the A330 at Qantas, 
Ethiopian Airlines, Icelandair, and Kenya Airways15; 
(b) displacement or impedance within the m eaning of Article 6.3(b) of the A330 from the 
markets of Australia, Ethiopia, Iceland, and Kenya16; 
(c) significant lost sales within the meaning of Article 6.3(c) of the Original A350 at 
Ethiopian Airlines, Icelandair, and Kenya Airways17; 
(d) displacement or impedance within the meaning of Article 6.3(b) of the Original A350 
from the markets of Ethiopia, Iceland, and Kenya18; 
(e) significant price suppression with regard to the A330 in the world market19; 
(f) significant price suppression with regard to the Original A350 in the world market20; 
and 
(g) significant price suppression with regard to Airbus 200-300 seat large civil aircraft in 
the world market.21 
These findings are in error and is based on errone ous findings on issues of law and related legal 
interpretations, including an incorrect interpretati on of Articles 5(c) and 6.3(b) and (c) of the 
SCM Agreement.22  The United States also requests the Appellate Body to find that the Panel failed to 
make "an objective assessment of the matter before it, including an objective assessment of the facts 
                                                      
11Panel Report, para. 7.205 and 8.3. 
12Panel Report, paras. 7.770, 7.779, and 8.3. 
13In this proceeding, the United States treats the term "European Union" as synonymous with the term 
"European Communities". 
14Panel Report, para. 7.1797. 
15Panel Report, paras. 7.1787 and 7.1794. 
16Panel Report, para. 7.1791. 
17Panel Report, paras. 7.1787-7.1788. 
18Panel Report, para. 7.1791. 
19Panel Report, para. 7.1792. 
20Panel Report, para. 7.1792. 
21Panel Report, para. 7.1797 and 7.1799. 
22Panel Report, paras. 7.1773, 7.1780, 7.1785-7.1788, 7.1791-7.1797, and 8.3. WT/DS353/10 
Page 4  
 
  of the case and the applicability of and conformity with the relevant covere d agreements" as required 
by Article 11 of the DSU by concl uding, without a basis in the evidence contained in the panel record, 
that"{t}he ability to define and manage the comple x interaction of design processes, organization and 
tools so as to enable the robust development and manufacturing of an aircraft at minimum time and 
cost … is a challenge that Boeing can meet th anks in large part to NASA and DOD funding and 
support".
23 
11. The United States seeks review by the Appellate Body of the Panel's findings:  
(a) that the effect of the Foreign Sales Cor poration/Extraterritorial Income subsidies and 
the Washington state B&O tax subsidies in  the 100-200 seat large civil aircraft 
product market were (i) to significantly suppress Airbus' prices and to cause Airbus to 
lose significant sales;  and (ii) to displa ce and impede EU exports from third country 
markets; 
(b) that the effect of the Foreign Sales Corpor ation/Extraterritorial Income subsidies, the 
Washington state B&O tax subsidies, and the City of Everett B&O tax subsidies in the 300-400 seat large civil aircraft product ma rket were (i) to significantly suppress 
Airbus' prices and to cause Airbus to lose significant sales;  and (ii) to displace and 
impede EU exports from third country markets. 
These findings are in error and are based on errone ous findings on issues of law and related legal 
interpretations, including an incorrect interpretati on of Articles 5(c) and 6.3(b) and (c) of the 
SCM Agreement.
24  The United States also requests the Appellate Body to find that the Panel failed to 
"set out the findings of fact, the applicability of re levant provisions and the basic rationale behind any 
findings and recommendations that it makes" as re quired by Article 12.7 of the DSU by issuing 
generic findings of displacement or impedance "f rom third country markets" and "significant lost 
sales", without stating which country markets or which sales.25 
__________  
                                                      
23Panel Report, para. 7.1772. 
24Panel Report, paras. 7.1823, 7.1854(b)-(c), and 8.3. 
25Panel Report, paras. 7.1817-7.1818 and 7.1822-7.1823.