. /.   WORLD TRADE  
ORGANIZATION  WT/DS353/8 
4 April 2011 
 (11-1662) 
 Original:   English 
  
 
UNITED STATES – MEASURES AFFECTING TRADE  
IN LARGE CIVIL AIRCRAFT  
(SECOND COMPLAINT) 
 
Notification of an Appeal by the European Union
  
under Article 16.4 and Article 17 of the Understanding on Rules   
and Procedures Governing the Settlement of Disputes (DSU),  
and under Rule 20(1) of the Working Procedures for Appellate Review  
  
 The following notification, dated 1 April 2011, from the Delegation of the European Union, is 
being circulated to Members.  
_______________ 
 
 
 Pursuant to Article 16.4 and Article 17.1 of the DSU , the European Union hereby notifies to 
the Dispute Settlement Body its decision to appeal  to the Appellate Body certain issues of law 
covered in the Panel Report and cer tain legal interpretations devel oped by the Panel in the dispute 
United States – Measures Affecting Trade in  Large Civil Aircraft (Second Complaint)  (WT/DS353).  
Pursuant to Rule 20(1) of the Working Procedures for Appellate Review , the European Union 
simultaneously files this Notice of Appeal  with the Appellate Body Secretariat. 
 For the reasons to be further elaborated in  its submissions to the Appellate Body, the 
European Union appeals, and requests the Appellate Bo dy to reverse, modify or declare moot and of 
no legal effect the findings, conclusions and reco mmendations of the Panel, with respect to the 
following errors of law and legal in terpretations contained in the Pane l Report, and where indicated to 
complete the analysis
1: 
I. Preliminary Issue:  SCM Agreement  Annex V Procedure 
1. The Panel erred in its interpretation and application of the SCM Agreement , Article 7.4 and 
Annex V, paragraphs 1, 2 and/or 6 to 9, and/or failed to make an objective assessment pursuant to 
Article 11 of the DSU , and/or falsely exercised judicial econom y, when it rejected the EU claims and 
arguments to the effect that an Annex V proce dure is initiated by negative consensus, that the 
conditions for such a procedure we re fulfilled in this case, and that non-cooperation by the United 
States entailed the consequences in para graphs 6 to 9 of Annex V of the SCM Agreement .2  T h e  
European Union requests the Appellate  Body to complete the analysis. 
                                                      
1 Pursuant to Rule 20(2)(d)(iii) of the Working Procedures for Appellate Review  this Notice of Appeal 
includes an indicative list of the paragraphs of the Panel Report containing the alleged errors, without prejudice to the ability of the European Union to refer to other para graphs of the Panel Report in the context of its appeal. 
2 Panel Report, paras. 7.19-7.22, particularly 7.22, first and final sentences.  WT/DS353/8 
Page 2  
 
  II. Subsidies 
2. The Panel erred in its interpretation a nd application of Article 2.1 of the SCM Agreement  
when it found that the European Union had not de monstrated that any subsidy involved in the 
allocation of patent rights under NASA and DOD R& D contracts and agreements with Boeing is 
specific within the meaning of Article 2 of the SCM Agreement .
3 
3. The Panel erred in its interpreta tion of Article 1.1(a)(1) of the SCM Agreement  when it found 
that transactions properly characterized as purchases of services are excluded from the scope of Article 1.1(a)(1) of the SCM Agreement .
4 
III. Subsidies Contingent/Conditional in Fact upon Export 
4. The Panel erred in its interpretation and appli cation of Article 3.1(a) and footnote 4 of the 
SCM Agreement , and/or failed to make an objective assessment, including an objective assessment of 
the facts, pursuant to Article 11 of the DSU , when it found that the European Union had not 
demonstrated that HB 2994 and the B&O tax rate re ductions and instances of application are subsidies 
contingent/conditiona l in fact upon export.5  The European Union requests the Appellate Body to 
complete the analysis. 
IV. Adverse Effects 
5. The Panel erred in its inte rpretation and application of Articles 5 and 6.3 of the SCM 
Agreement  when it found that it was not appropriate to aggregate the effects of the B&O tax subsidies 
and the effects of the aeronautics R&D subsidies in assessing whether serious prejudice was caused to 
the European Union in the 200-300 seat LCA market.6 
6. The Panel erred in its inte rpretation and application of Articles 5 and 6.3 of the SCM 
Agreement  when it failed to analyse the effects of th e US aeronautics R&D subsidies, the FSC/ETI 
subsidies, the B&O tax subsidies and the remaining subsidies  on an aggregate basis, but rather 
assessed the remaining subsidies  separately, concluding that they ha ve not affected Boeing's market 
behaviour and/or prices in a manner giving rise to se rious prejudice to the interests of the European 
Union.7 
7. The Panel acted inconsistently with the principl e of due process, the principle that reasonable 
inferences can and should be drawn from inst ances of non-cooperation, Article 11 of the DSU  and 
paragraphs 6 to 9 of Annex V of the SCM Agreement  when, without providing the Parties with a 
further opportunity to comment, without putting further questions to the United States pursuant to Article 13 of the DSU  or otherwise, and without drawing appropriate inferences from US 
non-cooperation, it excluded fro m its assessment of adverse effects the effects of assistance 
instruments funded through the RDT&E programmes other than in relation to the ManTech and 
DUS&T programmes.
8 
__________  
                                                      
3 Panel Report, paras 7.1276-7.1294, particularly para. 7.1294. 
4 Panel Report, paras. 7.953-7.970 and para. 7.1136, particularly para. 7.970, final sentence. 
5 Panel Report, paras. 7.1513-7.1590, particularly paras. 7.1543, 7.1583, 7.1589, 7.1590, and 8.2(b). 
6 Panel Report, para. 7.1824, final sentence. 
7 Panel Report, paras. 7.1825-7.1828, particular ly para. 7.1828, penultimate and final sentences. 
8 Panel Report, para. 7.1701, particularly sixth and ninth to eleventh sentences.