UNITED STATES – MEASURES AFFECTING TRADE IN LARGE CIVIL AIRCRAFT (SECOND COMPLAINT)
Document: Recourse to Article 21.5 of the DSU by the European Union Request for the Establishment of a Panel
Date: 12 October 2012
Document codes: WT/DS353/18
Complainant: EU
Respondent: U.S.
Third parties: Australia, Brazil, Canada, China, Japan, South Korea
Dispute stage: Implementation & Compliance
Agreements cited: Art. 3.1, 3.2, 5, 6.3, 1.1, 2  Subsidies and Countervailing Measures (SCM)Art. III:4  GATT 1994

UNITED STATES – MEASURES AFFECTING TRADE
IN LARGE CIVIL AIRCRAFT
(SECOND COMPLAINT)

Recourse to Article 21.5 of the DSU by the European Union

Request for the Establishment of a Panel

 The following communication, dated 11 October 2012, from the delegation of the European
Union to the Chairperson of the Dispute Settlement Bo dy, is circulated pursuant to Article 21.5 of the
DSU.

Aircraft (Second Complaint) ( US – Large Civil Aircraft ). The request was circulated in document
 on 2 October 2012. The European Un ion requested these consultations pursuant to
Articles 4 and 21.5 of the Understanding on Rules and Procedures Governing the Settlement of
Disputes (DSU); Article XXIII:1 of the General Agreement on Tariffs and Trade 1994 (GATT 1994);
Articles 4.1, 7.1 and 30 of the Agreement on Subsidies and Countervailing Measures ( SCM
Agreement), to the extent that Article 30 incorporates Article XXIII of the GATT 1994 ; and the
"Agreed Procedures under Articles 21 and 22 of the Dispute Settlement Understanding and Article 7
of the SCM Agreement" concluded by the European Union and th e United States with respect to this
dispute on 12 January 2012 (Sequencing Agreement).
1
2. Consultations were held on 10 October 2012, pursuant to each of the above-referenced
provisions, with a view to reaching a mutually satisf actory solution. The consultations failed to settle
the dispute.
3. Accordingly, "there is a disagreement as to the existence or consistency with a covered
agreement of measures taken to comply with the recommendations and rulings" of the Dispute
Settlement Body (DSB), within the meaning of Article 21.5 of the DSU. The European Union hereby
requests the establishment of a panel, pursuant to Articles 6 and 21.5 of the DSU, Article XXIII:2 of
the GATT 1994; Articles 4.4, 7.4 and 30 of the Agreement on Subsidies and Countervailing Measures
(SCM Agreement), to the extent that Article 30 incorporates Article XXIII of the GATT 1994; and the
Sequencing Agreement.
4. On 23 March 2012, the DSB adopted the Appella te Body Report and the Panel Report (as
modified) in US – Large Civil Aircraft , which found that US federal, state and local governments

1 WT/DS353/14, 27 April 2012, , Understanding between the European Union and the United States Regarding Procedures
under Articles 21 and 22 of the DSU, concluded 12 January 2012.

provide subsidies to US producers of large civil aircraft (LCA) – specifically, the Boeing Company
(Boeing) – that are inconsistent with US obligations under the SCM Agreement . In particular, the
DSB ruled that the following are specific subsidies, within the meaning of Articles 1 and 2 of the
SCM Agreement , that cause adverse effects, in the form of serious prejudice, or threat thereof, to
European Union (EU) interests, within the meaning of Articles 5(c) and 6.3(b) and (c) of that same
Agreement:
 Payments and access to government faciliti es, equipment, and employees under National
Aeronautics and Space Administration (NASA) aeronautics research & development (R&D)
programs;
 Payments and access to facilities under US Depa rtment of Defense (DoD) aeronautics R&D
programs;
 Tax exemptions under Foreign Sales Corpora tion/Extraterritorial Income (FSC/ETI)
legislation and successor acts;
 Washington State business and occupation (B&O) tax rate reductions; and,
 Tax exemptions related to Industrial Revenue Bonds (IRBs) issued by the City of Wichita,
Kansas.
5. The DSB recommended that the United States take appropriate steps to remove the adverse
effects or withdraw the subsidies.
2 Under Article 7.9 of the SCM Agreement, the United States had
until 24 September 2012 to comply with the DSB’s recommendations. The DSB also ruled that the
United States provides subsidies to Boeing that are prohibited by the SCM Agreement, and recalled
that prior recommendations of the DSB with respect to this matter continue to be operative.3
6. By communication dated 23 September 2012, the United States notified the European Union
that the United States has taken a number of actions allegedly withdrawing the subsidies or removing
their adverse effects (23 September 2012 notification). The actions and events listed by the United
States in its 23 September 2012 notification do not withdraw the subsidies or remove their adverse
effects, as required by Articles 4.7 and 7.8 of the SCM Agreement . Instead, after the end of the
implementation period on 24 September 2012, the Un ited States maintains specific subsidies that
cause present adverse effects to EU interests, that are prohibited subsidies contingent on export
performance or on the use of domestic over imported goods, and that are inconsistent with the United
States’ national treatment obligations, as detailed below in Section II. Accordingly, in the view of the
European Union, the United States has failed to achieve compliance with the recommendations and
rulings of the DSB.
I. MEASURES
7. The 23 September 2012 notification, as well as other available information, indicates that,
after the end of the implementation period on 24 September 2012, the United States maintains billions
of dollars of subsidies, within the meaning of Article 1.1 of the SCM Agreement, including both those
subsidies that the DSB ruled to be specific subs idies causing adverse eff ects, as well as additional
subsidies that constitute "measures taken to comp ly", within the meaning of Article 21.5 of the DSU.
These subsidies, listed below, cause present adverse effects, in the form of serious prejudice, and a
threat thereof, are prohibited, and are inconsiste nt with national treatment obligations, as detailed
further in Section II below.
4

2 Minutes, DSB Meeting of 23 March 2012, WT/DSB/M/313, para. 79.
3 Panel Report, US – Large Civil Aircraft (Second Complaint), particularly Section VIII.
4 The NASA and DoD programs and program elements listed below should be understood to include
all NASA or DoD R&D programs and program elements included within the meanings of such terms as used by

A NASA R&D SUBSIDIES
8. Through the following programs (as reflected in NASA’s annual Budget Estimates for Fiscal
Years 1989 through 2013),5 as well as through contracts, assistance instruments, and other agreements
(as modified) entered into under these programs, NAS A maintains subsidies that presently benefit US
LCA producers by providing Boeing with funding and access to government facilities, equipment, and
employees for R&D applicable to the developmen t, design, and production of LCA, as well as by
providing Boeing with royalty-free use of the tec hnologies developed with such funding and support
or use of such technologies on preferential terms:
 Advanced Composites Technology;
 High Speed Research;
 Advanced Subsonic Technology;
 High Performance Computing and Communications;
 Aviation Safety Program;
 Quiet Aircraft Technology;
 Vehicle Systems;
 Research and Technology Base;
 Fundamental Aeronautics;
 Integrated Systems Research Program;
 Aeronautics Strategy and Management;
 Aeronautics Test Program;
 High-End Computing Program;6 and,
 Strategic Capabilities Assets Program.7
9. To the extent that they were not entered in to pursuant to the programs listed above, NASA
also maintains its subsidies by entering into a nd following the terms of the contracts and other
agreements (as modified) with Boeing listed in Annex A of the United States’ 23 September 2012
notification. Annex A of the 23 September 2012 notif ication is attached to this request, and the
contracts listed therein are incorporated into this request.
10. Through these NASA programs, contracts, a nd other agreements, the US Government
provides financial contributions within the mean ing of Article 1.1(a)(1)(i)-(iii) on terms more
favourable than would be available on the commerc ial market, which provide a benefit within the
meaning of Article 1.1(b). These subsidies are specif ic within the meaning of Articles 1.2, 2.1, and
2.3 of the SCM Agreement.

the European Union before the Original Panel in DS353, regardless of any prior or subsequent changes in titles,
budgetary codes, or organizational structure.
5 See http://www.nasa.gov/news/budget/index.html; see also Panel Report, US – Large Civil Aircraft
(Second Complaint), Section VII.D.5.
6 See http://www.hec.nasa.gov/index.html (including the High-End Computing Capability project, see
http://www.nas.nasa.gov/hecc/); see also, e.g., NASA Budget Estimates for FY 2013, at ES-2, 6 (Earth Sciences
Account, Computing and Management Program).
7 See, e.g. , NASA Budget Estimates for FY 2013, at CAS-28 (Cross-Agency Support Account);
http://scap.hq.nasa.gov/.

B D
EPARTMENT OF DEFENSE R&D SUBSIDIES
11. Through the DoD Research, Development, Test, and Evaluation (RDT&E) Program, as well
as through contracts, assistance instruments, and othe r agreements (as modified) entered into under
this program, the US DoD maintains subsidies that presently benefit US LCA producers by providing
Boeing with funding and access to government facilities, equipment, and employees for R&D
applicable to the development, design, and produc tion of LCA on terms more favourable than would
be available on the commercial market, as well as by providing Boeing with royalty-free use of the
technologies developed with such funding and supp ort or use of such technologies on preferential
terms. The RDT&E Program, and the content thereof, is reflected in the annual DOD RDT&E
Program Budget Justifications (Exhibits R-2) for Fiscal Years 1991 through 2013.8
12. In addition, through the following US Air Fo rce, Navy, Army, and Defense-Wide program
elements (PEs) of the RDT&E Program, as well as through contracts, assistance instruments, and
other agreements (as modified) entered into unde r these PEs, the US DoD maintains subsidies that
presently benefit US LCA producers by providing Boeing with funding and access to government
facilities, equipment, and employees for R&D applic able to the development, design, and production
of LCA on terms more favourable than would be available on the commercial market, as well as by
providing Boeing with royalty-free use of the tec hnologies developed with such funding and support
or use of such technologies on preferential terms:
 A-6 Squadrons (PE 0204134N);
 Advanced Materials for Weapons Systems (PE 0603112F);
 Aerospace Avionics/Aerospace Sensors (PE 0602204F);
 Aerospace Flight Dynamics/Aerospace Vehicle Technologies (PE 0602201F);
 Aerospace Propulsion (PE 0602203F);
 Aerospace Propulsion and Power Technology (PE 0603216F);
 Aerospace Structures/Aerospace Technology Dev/Demo (PE 0603211F);
 Airborne Warning and Control System (AWACS) (PE 0207417F);
 Aviation Safety Technologies (PE 0606301D8Z);
 Aviation Survivability (PE 0603216N);
 AV-8B Aircraft (PE 0604214N);
 B-2 Advanced Technology Bomber (PE 0604240F);
 C-17 (PE 0401130F and PE 0604231F);
 Comanche (PE 0604223A);
 CV-22 (PE 0401318F);
 Defense Research Sciences (PE 0601102F);
 Dual Use Applications/Dual Use Science & Technology Program (PE 0602805F);
 F/A-18 Squadrons (PE 0204136N);

8 See http://www.saffm.hq.af.mil/budget/ (Air Force);
http://www.finance.hq.navy.mil/FMB/13pres/BOOKS.htm (Navy);
http://asafm.army.mil/offices/BU/BudgetMat.aspx (Army);
http://comptroller.defense.gov/defbudget/fy2013/budget_justification/index.html (Defense Wide); see also
Panel Report, US – Large Civil Aircraft (Second Complaint), Section VII.D.6.

 F-22 (PE 0604239F);
 Flight Vehicle Technology (PE 0603205F);
 Flight Vehicle Technology Integration (PE 0603245F);
 KC-10S (PE 0401219F);
 KC-46, Next Generation Aerial Refueling Aircraft (PE 0605221F);
 Joint Strike Fighter (PE 0603800F, PE 0603800N, PE 0603800E, PE 0604800F, and PE
0604800N);
 Long Range Strike Bomber (PE 0604015F);
 Manufacturing Technology/Industrial Preparedn ess Program9 (Air Force (PE 0603771F and
PE 0708011F); Navy (PE 0708011N); Defense Lo gistics Agency (PE 0708011S); Defense
Wide Manufacturing Science and Technology (PE 0603680D8Z))
 Materials (PE 0602102F);
 Materials and Biological Technology (PE 0602715E);
 Multi-Mission Maritime Aircraft (P-8A) (PE 0605500N);
 RDT&E for Aging Aircraft (PE 0605011F);
 Sustainment Science & Technology (PE 0603199F);
 Technology Transfer (PE 0604317F);
 Technology Transition (PE 0604858F); and
 V-22 (PE 0604262N).
13. To the extent that they were not entered into pursuant to the programs listed above, DoD also
maintains its subsidies to US LCA producers by enteri ng into and following the terms of the contracts
and other agreements (as modified) with Boeing listed in Annex B of the United States’ 23 September
2012 notification. Annex B of the 23 September 2012 notification is attached to this request, and the
contracts listed therein are incorporated into this request.
14. Through these DoD programs, contracts, and ot her agreements, the US Government provides
financial contributions within the meaning of Artic le 1.1(a)(1)(i)-(iii) on terms more favourable than
would be available on the commercial market, wh ich provide a benefit within the meaning of
Article 1.1(b). These subsidies are specific within the meaning of Articles 1. 2, 2.1, and 2.3 of the
SCM Agreement.
C FEDERAL AVIATION ADMINISTRATION R&D SUBSIDIES
15. Through the Continuous Lower Emissions, Energy, and Noise (CLEEN) program, 10 the US
Federal Aviation Administration (FAA), in colla boration with NASA, maintains subsidies that
presently benefit US LCA producers. Specifically , through the CLEEN program, the FAA provides
Boeing with funding and access to government facilities, equipment, and employees for R&D
applicable to the development, design, and produc tion of LCA, as well as by providing Boeing with
royalty-free use of the technologies developed with such funding and support, or use of such

9 Established pursuant to 10 U.S.C. § 2521. All statutory citations herein refer to the provisions in
force as of the date of this request in order to assist in identifying the precise measure, but are not intended to
narrow the scope of the challenged measure as described by excluding earlier amended and other related
statutory provisions.
10 See
http://www.faa.gov/about/office_org/headquarters_offices/apl/research/aircraft_technology/cleen/.

technologies on preferential terms. Such R&D support is authorized by 49 U.S.C. §§ 44501-44517,
48102, and periodic reauthorization legislation.
16. Through the CLEEN program, the US Governme nt provides financial contributions within
the meaning of Article 1.1(a)(1)(i)-(iii) on terms more favourable than would be available on the
commercial market, which provide a benefit within the meaning of Article 1.1(b). These subsidies are
specific within the meaning of Articles 1.2, 2.1, and 2.3 of the SCM Agreement.
D W
ASHINGTON STATE AND LOCAL SUBSIDIES
17. The State of Washington and its political s ubdivisions maintain the following subsidies
presently benefiting Boeing:
 State B&O tax rate reduction for manufacturers of commercial aircraft, codified at Revised
Code of Washington (RCW) 82.04.260(11);
 State B&O tax credits for preproduction/aerosp ace product development and property taxes,
codified at RCW 82.04.4461, 4463;
 State sales and use tax exemptions for computer hardware, peripherals, and software, codified
at RCW 82.08.975 and 82.12.975;
 City of Everett B&O tax reductions, codified at Everett Municipal Code 3.24.50, and;
 State B&O tax credits for leasehold excise taxe s on covered buildings and land, pursuant to
RCW 82.04.4463, as amended by Section 10 of House Bill 2466, 2006 Wash. Sess. Laws
787.
Through these measures, the State of Washington and its political subdivisions provide financial
contributions within the meaning of Article 1.1(a)(1)(i)-(ii) of the SCM Agreement , that confer a
benefit to Boeing within the meaning of Article 1.1(b) of the SCM Agreement. These subsidies are
specific within the meaning of Articles 1.2, 2.1, and 2.3 of the SCM Agreement.

18. In addition, the State of Washington and its political subdivisions maintain the following
subsidies presently benefiting Boeing through the:
 Establishment of a "Dreamlifter Operations Ce nter" at Paine Field by Snohomish County,
Washington, as reflected in Snohomish County Council Motion 12-062; and,
 Establishment of the "Joint Center for Aerospace Technology Innovation" to inter alia provide
aerospace R&D-related funding, coordination, and training, codified at RCW Chapter
28B.155.
Through these measures, the State of Washington and its political subdivisions provide financial
contributions within the meaning of Article 1.1(a)(1)(i)-(iii) of the SCM Agreement , that confer a
benefit to Boeing within the meaning of Article 1.1(b) of the SCM Agreement. These subsidies are
specific within the meaning of Articles 1.2, 2.1, and 2.3 of the SCM Agreement.

E FSC/ETI
 LEGISLATION AND SUCCESSOR ACTS
19. The United States maintains tax exemptions an d tax exclusions under FSC/ETI legislation
and successor legislation presently benefiting Boeing, specifically, the FSC Repeal and
Extraterritorial Income Exclusion Act of 2000 § 5, Pub. L. No. 106-519, 114 Stat. 2423; the American
Jobs Creation Act of 2004 § 101, Pub. L. No. 108-357, 118 Stat. 1418; and the Tax Increase
Prevention and Reconciliation Act of 2005 § 513, Pub. L. No. 109-222, 120 Stat. 345. The United
States maintains such tax exemptions and exclusio ns in accordance with Internal Revenue Service

Office of the Chief Counsel Memorandum No. AM 2007-001, "Qualification for FSC benefits and
ETI Exclusions", dated 26 December 2006.
20. Through these measures, the United States provi des financial contributions within the
meaning of Article 1.1(a)(1)(ii) of the SCM Agreement , that confer a benefit to Boeing within the
meaning of Article 1.1(b) of the SCM Agreement. These subsidies are specific within the meaning of
Articles 1.2 and 2.3 of the SCM Agreement.
F STATE OF KANSAS AND CITY OF WICHITA SUBSIDIES
21. The State of Kansas and the City of Wichita maintain state and local property and sales tax
abatements, pursuant to K.S.A. §§ 79-201a, 79-3606(d), and 79-3640, that presently benefit Boeing in
relation to the issuance of IRBs, pursuant to K.S.A. § 12-1741, by the City of Wichita.
22. Through these measures, the State of Kansas and the City of Wichita provide financial
contributions within the meaning of Article 1.1(a)(1)(ii) of the SCM Agreement, that confer a benefit
to Boeing within the meaning of Article 1.1(b) of the SCM Agreement. These subsidies are specific
within the meaning of Articles 1.2, 2.1, and 2.3 of the SCM Agreement.
G SOUTH CAROLINA STATE AND LOCAL SUBSIDIES
23. The State of South Carolina and its political subdivisions, including the County of Charleston,
maintain various subsidies for Boeing related to the production of LCA and LCA components at
facilities in North Charleston, South Carolina, thr ough two sets of incentives: (i) "Project Gemini"
incentives, related primarily to the location, estab lishment, and operation of an additional final
assembly line for the 787 at the Charleston International Airport; and (ii) "Project Emerald"
incentives, related to the location, establishment, and operation of manufacturing facilities for 787
fuselage components on the same site.
i. Project Gemini-Related Subsidies
24. South Carolina and its political subdivisions ma intain several subsidies related to Project
Gemini presently benefitting Boeing:
 Provision of a long-term lease of government-owned land at preferential rates, pursuant to a
ground lease agreement between the Charl eston County Aviation Authority and South
Carolina Public Railways, as amended, a nd a ground sublease agreement between South
Carolina Public Railways and Boeing, as amende d, thereby providing a financial contribution
within the meaning of Article 1.1(a)(1)(ii)-(iii) of the SCM Agreement;
 Provision of facilities and infrastructure at the Charleston International Airport site, as
provided for in the Project Gemini Agreem ent between Boeing and the State of South
Carolina, dated 1 January 2010, funded th rough state general obligation bonds issued
pursuant to Title 11, Chapter 41 of the S.C. Code, as amended by Section 5 of H3130, Act
No. 124, 2009 S.C. Acts 1092 (H3130), and S.C. Code § 55-11-520, at no cost to Boeing,
thereby providing a financial contribution within the meaning of Article 1.1(a)(1)(i) and (iii)
of the SCM Agreement;
 Exemptions from state sales and use taxes for aircraft fuel, computer equipment, and
construction materials, establis hed by Sections 2, 3, and 4 of H3130, respectively, and
codified at S.C. Code § 12-36-2120(9)(e) a nd (f), (65)(b), and (67), thereby providing a
financial contribution within the meaning of Article 1.1(a)(1)(ii) of the SCM Agreement;
 Reductions of state corporate income taxes through an income allocation and apportionment
agreement, entered into pursuant to S.C. C ode § 12-6-2320(B), as amended by Section 1 of

H3130, thereby providing a financial contribution within the meaning of Article 1.1(a)(1)(ii)
of the SCM Agreement;
 The provision of corporate income tax credits, as provided for in S.C. Code § 12-6-
3360(E)(1), by virtue of designating the Boeing site in North Charleston as part of a
business/industrial park jointly established a nd developed by Charleston County and Colleton
County, South Carolina, thereby providing a fi nancial contribution within the meaning of
Article 1.1(a)(1)(i)-(ii) of the SCM Agreement;
 Property tax exemptions for Boeing’s Large Cargo Freighters, pursuant to S.C. Code § 12-37-
220(B)(33), as amended by Section 1 of H3482, Act No. 45, 2009 S.C. Acts 763, thereby
providing a financial contribution within the me aning of Article 1.1(a)(1)(ii) of the SCM
Agreement;
 Establishment of workforce recruitment, tr aining and development programs for Boeing,
thereby providing a financial contribution within the meaning of Article 1.1(a)(1)(i) and (iii)
of the SCM Agreement; and,
 Property tax reductions under a fee-in-lieu-of taxes agreement between Charleston County
and Boeing, dated 1 December 2009, as authorized by Title 12, Chapter 44 of the S.C. Code,
including the provision of special source cred its as provided for in such agreement, and
authorized by S.C. Code § 4-1-175, thereby providing a financial contribution within the
meaning of Article 1.1(a)(1)(i)-(ii) of the SCM Agreement.
ii. Project Emerald-Related Subsidies
25. South Carolina and its political subdivisions maintain the following subsidies related to
Project Emerald presently benefitting Boeing:
 Provision of a long-term lease of government-owned land at below-market rates, pursuant to a
ground lease agreement between the Charl eston County Aviation Authority and South
Carolina Public Railways, as amended, a nd a ground sublease agreement between South
Carolina Public Railways and Boeing, as amende d, thereby providing a financial contribution
within the meaning of Article 1.1(a)(1)(ii)-(iii) of the SCM Agreement;
 Provision of facilities and infrastructure at the Charleston International Airport site, as
provided for in the Project Emerald Confid ential Site Development Agreement, funded
through state general obligation bonds issued pursuant to Title 11, Chapter 41 of the S.C.
Code, at no cost to Boeing, thereby providing a financial contribution within the meaning of
Article 1.1(a)(1)(i) and (iii) of the SCM Agreement;
 The provision of corporate income tax credits, as provided for in S.C. Code § 12-6-
3360(E)(1), by virtue of designating the Project Emerald site at Charleston International
Airport as part of a business/industrial park jointly established and developed by Charleston
County and Colleton County, South Carolina, thereby providing a financial contribution
within the meaning of Article 1.1(a)(1)(i)-(ii) of the SCM Agreement; and,
 Property tax reductions under a fee-in-lieu-of taxes agreement between Charleston County
and Vought Aircraft Industries, Global Aerona utica, and Boeing, dated 19 December 2006,
and assigned to Boeing on or about 10 February 2010, as authorized by Title 12, Chapter 44
of the S.C. Code, and provided for in the Pr oject Emerald Confidential Site Development
Agreement, including the provision of infr astructure credits as provided for in such
agreement, and authorized by S.C. Code § 12-44-70, thereby providing a financial
contribution within the meaning of Article 1.1(a)(1)(i)-(ii) of the SCM Agreement.
26. Through all of these Project Gemini-related measures and Project Emerald-related measures,
the United States provides financial contributions wi thin the meaning of Article 1.1(a)(1) of the SCM
Agreement, that confer a benefit to Boeing within the meaning of Article 1.1(b) of the SCM

Agreement. These subsidies are specific within the meani ng of Articles 1.2, 2.1, 2.2, and 2.3 of the
SCM Agreement.
27. In addition to the measures specifically listed a bove in Section I of this request, the European
Union also considers that any amendments, supplem ents, extensions, replacement measures, renewal
measures, related measures, or implementing measures constitute specific subsidies.
II. LEGAL BASIS
28. The European Union considers that, after the end of the implementation period, the United
States maintains a series of subsidies, w ithin the meaning of Article 1.1 of the SCM Agreement
through each of the measures listed in Section I, a bove. Each of those measures provides a financial
contribution within the meaning of Article 1.1(a)(1 ), as detailed further in Section I, and confers a
"benefit" within the meaning of Article 1.1(b) by providing the financial contribution on terms more
favourable than would be available on the commercia l market. Those subsidi es are specific, within
the meaning of Articles 1.2 and 2 of the SCM Agreement, as detailed further in Section I.
29. Those specific subsidies presently benefit the development, production and sale of Boeing’s
737NG, 737 Max, 747, 767, 777 and 787 families of LC A, as well as any other future derivatives of
these LCA families, including of the 777. Collec tively, and under the conditions of competition
present in the LCA markets, the subsidies listed in items I.A to G cause present adverse effects, in the
form of serious prejudice, and threat thereof, to EU interests, inconsistently with Articles 5(c), 6.3(a),
6.3(b) and 6.3(c), including Articles 6.4 and 6.5, of the SCM Agreement . The effects of those
subsidies adversely impact sales, market shares and prices of Airbus’ A320, A320neo, A330,
A350XWB and A380 families of LCA. Specifically, the subsidies cause present serious prejudice, or
threat thereof, to EU interests, in the form of: (i) displacement and impedance of EU imports into the
United States, within the meaning of Article 6.3(a) of the SCM Agreement ; (ii) displacement and
impedance of EU exports to other third country markets, within the meaning of Article 6.3(b) of the
SCM Agreement (including on the basis of Article 6.4 of the SCM Agreement); and, (iii) significant
price undercutting, price suppression, price depression, and lost sales, within the meaning of Article
6.3(c) of the SCM Agreement (including on the basis of Article 6.5 of the SCM Agreement).
30. In addition, the subsidies provided through the measures listed in items I.A to G are
contingent, in law or in fact, on actual or an ticipated export performance, and accordingly, are
inconsistent with Articles 3.1(a) (including footnote 4) and 3.2 of the SCM Agreement
31. Moreover, the subsidy measures listed in items I.A to G are contingent, in law or in fact, on
the use of domestic over imported goods, such that th ey are, accordingly, inconsistent with Articles
3.1(b) and 3.2 of the SCM Agreement.
32. Through those same measures listed in items I.A to G above, the United States accords
treatment less favourable to imported products than that accorded to like products of US origin, in law
or in fact, inconsistently with Articles III:4 of the GATT 1994 , and maintains internal quantitative
regulations that require, directly or indirectly, that specified amounts or proportions of products be
supplied from domestic sources, in law or in f act, inconsistent with Article III:5 of the GATT 1994.
Moreover, the United States otherwise applies such re gulations in a manner contrary to the principles
set forth in paragraph 1 of Artic le III, including the principle th at such laws, regulations and
requirements and internal quantita tive regulations should not be a pplied to imported or domestic
products so as to afford protection to domestic production.

33. The European Union asks that th is request for the establishment of a panel be placed on the
agenda for the next meeting of the DSB, which is scheduled to take place on 23 October 2012.

34. The European Union requests that the Panel be established in accordance with Articles 4.4
and 7.4 of the SCM Agreement and Article 21.5 of the DSU, and with the standard terms of reference
set out in Article 7 of the DSU. The European Union recalls that Article 21.5 of the DSU provides
that this matter shall be decided through recourse to the DSU, including wherever possible resort to
the original panel.
35. The European Union further requests that the DS B, together with the establishment of the
Panel, initiate the procedures provided in Annex V of the SCM Agreement, as required by paragraph 2
of that Annex. The European Union recalls that the DSB "shall" initiate these procedures, as required
by paragraph 2 of Annex V, and that such DSB action occurs automatically when there is a request for
initiation of an Annex V procedure and the DSB esta blishes a panel, as clarified by the Appellate
Body in US – Large Civil Aircraft.
11
36. The European Union would like to indicate, in conformity with paragraphs 1 and 3 of Annex
V, that the market considered rele vant by the European Union is a world market. In order to obtain
sufficiently representative data to resolve this dis pute while at the same time avoiding unnecessary
burdens on other WTO Members, the European Un ion intends to address questions under the Annex
V procedure to the United States and the following third-country Members:
Australia; Bahrain; Brazil; Canada; Chin a; Chile; Egypt; Ethiopia; Hong Kong;
Iceland; India; Indonesia; Japan; Jordan; Kenya; South Korea; Malaysia; Morocco;
Mexico; New Zealand; Nigeria; Norway; Oman; Panama; Qatar; Russian Federation;
Saudi Arabia; Singapore; Turkey; Ukraine; United Arab Emirates
37. The European Union is initiating consultati ons with the United States concerning the
designation of a facilitator (other than the Chairman of the DSB) pursuant to paragraph 4 of Annex V
of the SCM Agreement. The European Union considers that there would not be any reason to object
to a proposal to have resort to the original facilita tor in DS316 and DS317, if available. On the date
of circulation of this Request for Panel Establishment and Initiation of an Annex V Procedure, there is
no agreement concerning the identity of a facilitator other than the Chairman of the DSB. Should
such agreement be forthcoming prior to the DSB meeting at which the Panel is established and the
Annex V procedure initiated, the European Union intends to request that the DSB designate the
agreed person as the Facilitator. In the absence of such agreement, and if no other person is
designated, the European Union recalls that, as th e representative of the DSB, the Chairman is
responsible for discharging the function of facilitati ng an Annex V procedure until such time as that
function is delegated through the DSB's designation of another individual as the Facilitator pursuant
to paragraph 4 of Annex V.
12

Agreement to mean that the DSB's initiation of an inform ation-gathering procedure in a serious prejudice
dispute occurs automatically provided that a request for such a procedure has been made and a panel
established.").
12 Appellate Body Report, US – Large Civil Aircraft (Second Complaint) , para. 521: ("… as the
representative of the DSB, the Chairman is in principle responsible for discharging the function of facilitating an
Annex V procedure until such time as that function is delegated through the DSB's designation of another
individual as a facilitator pursuant to paragraph 4 of Annex V.").

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

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
Annex B

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
FA8650-11-2-213