UNITED STATES – MEASURES AFFECTING TRADE IN LARGE CIVIL AIRCRAFT (SECOND COMPLAINT) RECOURSE TO ARTICLE 21.5 OF THE DSU BY THE EUROPEAN UNION 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"), ARTICLE 7.6 OF THE AGREEMENT ON SUBSIDIES AND COUNTERVAILING MEASURES ("SCM AGREEMENT"), AND UNDER RULE 20(1) OF THE WORKING PROCEDURES FOR APPELLATE REVIEW
Document: OF THE UNDERSTANDING ON RULES AND PROCEDURES GOVERNING THE SETTLEMENT OF DISPUTES ("DSU"), ARTICLE 7.6 OF THE AGREEMENT ON SUBSIDIES AND COUNTERVAILING MEASURES ("SCM AGREEMENT"), AND UNDER RULE 20(1) OF THE WORKING PROCEDURES FOR APPELLATE REVIEW
Date: 6 July 2017
Document codes: WT/DS353/27
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
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"), ARTICLE 7.6 OF THE AGREEMENT ON SUBSIDIES AND
COUNTERVAILING MEASURES ("SCM AGREEMENT"), AND UNDER RULE 20(1)
OF THE WORKING PROCEDURES FOR APPELLATE REVIEW
The following communication, dated 29 June 2017, from the delegation of the European Union, is
being circulated to Members.

Pursuant to Article 16.4 and Article 17.1 of the DSU and Article 7.6 of the SCM Agreement, the
European Union hereby notifies to the Dispute Settle ment Body its decision to appeal to the
Appellate Body certain issues of law covered in the Panel Report and certain legal interpretations
developed by the Panel in the dispute United States – Measures Affecting Trade in Large Civil
Aircraft (Second Compla int) (Recourse to Article 21.5 of the DSU by the European Union )
(). 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.
The European Union is restricting its appeal to those errors that it believes constitute serious
errors of law and legal interpretation that need to be corrected. Non-appeal of an issue does not
signify agreement therewith.
For the reasons to be further elabor ated in its submissions to the Appellate Body, the European
Union appeals, and requests the Appellate Body to reverse, modify, or declare moot and of no
legal effect the findings, conclusions, and recommendations of the Panel, and to complete the legal
analysis, with respect to the following errors of law and legal interpretations contained in the Panel
Report:1
I. SUBSIDIES
A. DOD Procurement Contracts
1. The Panel failed to make an objective assessment of the matter, pursuant to Article 11 of
the DSU, when f inding that the provision to Boeing of funding, and of access to DOD
facilities, equipment, and employees, by the United States Department of Defense ( "DOD")
through pre-2007 and post -2006 DOD procurement contracts are not subsidies within the
meaning of Article 1 of the SCM Agreement.2 The Panel erred in characterising the provision
of funding and support to Boeing as "purchases of services", rather than as, respectively, a

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 paragraphs of the Panel Report in the context of its
appeal.
2 Panel Report, paras. 8.360-8.378, 8.311-8.316, 8.418-8.437, 8.1077.a, 9.220, 9.291, 9.298, 9.332,
9.333-9.335, 9.373, 9.476, 9.485, 9.486(a), 9.487(a), 9.487(c), 11.7.c.i, 11.8.a, 11.8.b, 11.8.e.

direct transfer of funds under Article 1.1(a)(1)(i) and the provision of goods and services
under Article 1.1(a)(1)(iii).3
2. The Panel also failed to make an objective assessment of the matter, pursuant to Article 11
of the DSU, when finding (in the alternative) that the allocation of intellectual property rights
arising from the DOD proc urement contracts does not demonstrate conferral of a benefit
within the meaning of Article 1.1(b) of the SCM Agreement.4
B. Foreign Sales Corporation/Extraterritorial Income Act Subsidies
3. The Panel erred in the interpretation of Articles 7.8 and 1.1(a)(1 )(ii) of the SCM Agreement,
when finding that the United States no longer continues to grant or maintain the subsidies
provided pursuant to the Foreign Sales Corporation/Extraterritorial Income ( "FSC/ETI") Act
after the end of the implementation period.5 The Panel erred in finding that, because there is
insufficient evidence that Boeing has actually used the tax concessions after 2006, there can
be no foregoing of revenue otherwise due within the meaning of Article 1.1(a)(1)(ii) of the
SCM Agreement.6
C. City of Wichita Industrial Revenue Bond Programme
4. The Panel erred in the interpretation of Articles 7.8 and 2.1(c) of the SCM Agreement, when
finding that the City of Wichita's Industrial Revenue Bond ("IRB") programme is no longer de
facto specific.7
5. The Panel erred in the application of Articles 7.8 and 2.1(c) of the SCM Agreement, when
finding that the City of Wichita's IRB programme is no longer de facto specific.8
6. The Panel failed to make an objective assessment of the matter pursuant to Article 11 of the
DSU, when finding that the City of Wichita 's IRB programme is no longer de facto specific,
within the meaning of Article 2.1(c) of the SCM Agreement.9
D. South Carolina Economic Development Bonds
7. The Panel erred in the interpretation of Articles 7 .8 and 2.1(c) of the SCM Agreement, when
finding that the subsidy provided by South Carolina to Boeing, through economic
development bond ( "EDB") proceeds used to fund Project Gemini facilities and
infrastructure, is not specific within the meaning of Article 2.1(c) of the SCM Agreement.10
8. The Panel erred in the application of Articles 7.8 and 2.1(c) of the SCM Agreement, when
finding that the subsidy provided by South Carolina to Boeing, through EDB proceeds used
to fund Project Gemini facilities and infras tructure, is not specific within the meaning of
Article 2.1(c) of the SCM Agreement.11

3 Panel Report, paras. 8.363-8.378, 8.311-8.316, 8.1077.a, 9.220, 9.291, 9.298, 9.332, 9.333-9.335,
9.373, 9.476, 9.485, 9.486(a), 9.487(a), 9.487(c), 11.7.c.i, 11.8.a, 11.8.b, 11.8.e.
4 Panel Report, paras. 8.418-8.437, 8.311-8.316, 8.1077.a, 9.220, 9.291, 9.298, 9.332, 9.333-9.335,
9.373, 9.476, 9.485, 9.486(a), 9.487(a), 9.487(c), 11.7.c.i, 11.8.a, 11.8.b, 11.8.e.
5 Panel Report, paras. 8.596-8.612, 8.1077.b, 9.252, 9.293, 9.333-9.335, 9.487(a), 11.7.c.ii, 11.8.a,
11.8.b, 11.8.e.
6 Panel Report, paras. 8.596-8.612, 8.1077.b, 9.252, 9.293, 9.333-9.335, 9.487(a), 11.7.c.ii, 11.8.a,
11.8.b, 11.8.e.
7 Panel Report, paras. 8.634-8.640, 8.1077.c, 9.277, 9.297, 9.333-9.335, 9.472, 9.484, 9.486(d),
9.487(a), 9.487(c), 11.7.c.iii, 11.8.a, 11.8.b, 11.8.e.
8 Panel Report, paras. 8.634-8.640, 8.1077.c, 9.277, 9.297, 9.333-9.335, 9.472, 9.484, 9.486(d),
9.487(a), 9.487(c), 11.7.c.iii, 11.8.a, 11.8.b, 11.8.e.
9 Panel Report, paras. 8.634-8.640, 8.1077.c, 9.277, 9.297, 9.333-9.335, 9.472, 9.484, 9.486(d),
9.487(a), 9.487(c), 11.7.c.iii, 11.8.a, 11.8.b, 11.8.e.
10 Panel Report, paras. 8.837-8.841, 8.843, 9.277, 9.297, 9.333-9.335, 9.472, 9.484, 9.486(d),
9.487(a), 9.487(c), 11.8.a, 11.8.b, 11.8.e, 8.1077.e, 11.7.c.v.
11 Panel Report, paras. 8.837-8.841, 8.843, 9.277, 9.297, 9.333-9.335, 9.472, 9.484, 9.486(d),
9.487(a), 9.487(c), 11.8.a, 11.8.b, 11.8.e, 8.1077.e, 11.7.c.v.

9. The Panel failed to make an objective assessment of the matter pursuant to Article 11 of the
DSU, when finding that the subsidy provided by South Carolina to Boeing, thr ough EDB
proceeds used to fund Project Gemini facilities and infrastructure, is not specific within the
meaning of Article 2.1(c) of the SCM Agreement.12
E. Multi-County Industrial Park Job Tax Credits
10. The Panel erred in the application of Articles 7.8 and 2.2 of the SCM Agreement , when
finding that the subsidy provided by South Carolina to Boeing through the multi -county
industrial park ("MCIP") job tax credits is not specific within the meaning of Article 2.2 of the
SCM Agreement.13
11. The Panel failed to make an objective assessment of the matter pursuant to Article 11 of the
DSU, when finding that the subsidy provided by South Carolina to Boeing through the MCIP
job tax credits is not specific within the meaning of Article 2.2 of the SCM Agreement.14
II. ADVERSE EFFECTS
A. Continuing Adverse Effects
12. The Panel erred in the interpretation of Article 7.8 of the SCM Agreement, when finding that,
to "take appropriate steps to remove the adverse effects" under that provision, a responding
Member found to be granting or maintaining an actionable subsidy need not remove adverse
effects that remain present after the end of the implementation period, in circumstances
where those effects result from sales transactions that were agreed prior to the end of the
implementation period and for which performance remains incomplete.15
13. The Panel erred in the application of Articles 7.8, 5, and 6.3 of the SCM Agreement, when
finding that sales that had occurred prior to the end of the implementation period can not
constitute "present" adverse effects under Article 7.8 of the SCM Agreement, even where
deliveries under those sales remain outstanding after the end of the implementation
period.16
14. The Panel failed to make an objective assessment of the matter under Article 11 of the DSU,
when finding that sales that had occurred prior to the end of the implementation period
cannot constitute "present" adverse effects under Article 7.8 of the SCM Agreement, even
though the original panel had determined that an adverse e ffect from such sales lasts until
deliveries under the sale are completed.17
15. The Panel failed to make an objective assessment of the matter under Article 11 of the DSU,
when finding that the European Union 's continuing adverse effects arguments were
"unsupported by the evidence and/or in contradiction with the findings made in the original
proceeding".18
16. The Panel erred in the application of Articles 7.8, 5, and 6.3 of the SCM Agreement, when
finding, on the basis of an erroneous counterfactual, that th e European Union 's continuing

12 Panel Report, paras. 8.837-8.841, 8.843, 9.277, 9.297, 9.333-9.335, 9.472, 9.484, 9.486(d),
9.487(a), 9.487(c), 11.8.a, 11.8.b, 11.8.e, 8.1077.e, 11.7.c.v.
13 Panel Report, paras. 8.931, 8.933, 8.1077.g, 9.277, 9.297, 9.333-9.335, 9.472, 9.484, 9.486(d),
9.487(a), 9.487(c), 11.7.c.vii, 11.8.a, 11.8.b, 11.8.e.
14 Panel Report, paras. 8.931, 8.933, 8.1077.g, 9.277, 9.297, 9.333-9.335, 9.472, 9.484, 9.486(d),
9.487(a), 9.487(c), 11.7.c.vii, 11.8.a, 11.8.b, 11.8.e.
15 Panel Report, paras. 9.107, 9.312-9.314, 9.332, 9.333-9.335, 9.487(a), 9.487(c), 11.8(a)-(b),
11.8(e).
16 Panel Report, paras. 9.307-9.314, 9.332, 9.333-9.335, 9.403 (footnotes 3323, 3329), 9.407,
9.487(a), 9.487(c), 11.8(a)-(b), 11.8(e).
17 Panel Report, paras. 9.307-9.314, 9.332, 9.333-9.335, 9.403 (footnotes 3323, 3329), 9.407,
9.487(a), 9.487(c), 11.8(a)-(b), 11.8(e).
18 Panel Report, paras. 9.315, 9.321-9.323, 9.326, 9.331, 9.332, 9.333-9.335, 9.487(a), 9.487(c),
11.8(a)-(b), 11.8(e).

adverse effects arguments were "unsupported by the evidence and/or in contradiction with
the findings made in the original proceeding".19
B. Role and Consequence of Product Market Delineation
17. The Panel erred in the interpretation of Articles 7.8, 5, and 6.3 of the SCM Agreement, when
interpreting those provisions to require that, as regards significant price suppression, price
depression, or lost sales, "a subsidized product can only cause serious prejudice to another
product if the two products in question compete in the same market".20
C. Collective Assessment of Effects of Multiple Subsidies
18. The Panel erred in the interpretation of Articles 7.8, 5, and 6.3 of the SCM Agreement in
identifying "aggregation" and "cumulation" as the only two permissible approaches to assess
collectively the effects of multiple subsidies.21
D. Causation Standard for Lost Sales
19. The Panel erred in the interpretation of Articles 7.8, 5, and 6.3 of the SCM Agreement, when
finding that there must be "no non-price factors that explain Boeing 's success in obtaining
the sale" in order for the subsidies at issue to be found to cause significant lost sales.22
E. Price Effects
20. The Panel erred in the interpretation of Articles 7.8, 5, and 6.3 of the SCM Agreement, when
finding that the European Union had failed to demonstrate that the untied state and local
cash flow subsidies and the untied post -2006 aeronautics R&D subsidies resulted in lower
prices for Boeing LCA.23
21. The Panel erred in the application of Articles 7 .8, 5, and 6.3 of the SCM Agreement, when
finding that the European Union had failed to demonstrate that the untied state and local
cash flow subsidies and the untied post -2006 aeronautics R&D subsidies resulted in price
effects.24
22. The Panel failed to make an objective assessment of the matter under Article 11 of the DSU,
when finding that the European Union had failed to demonstrate that the untied state and
local cash flow subsidies and the untied post -2006 aeronautics R&D subsidies resulted in
price effects.25
F. Technology Effects
23. The Panel erred in the application of Articles 7.8, 5, and 6.3 of the SCM Agreement, when
finding that the "technology effects" of the pre -2007 US aeronautics R& D subsidies, which
were found in the original proceedings to have accelerated the development of technologies

19 Panel Report, paras. 9.315, 9.321-9.323, 9.326, 9.331, 9.332, 9.333-9.335, 9.487(a), 9.487(c),
11.8(a)-(b), 11.8(e).
20 Panel Report, paras. 9.33, 9.487(a), 9.487(c), 11.8(a)-(b), 11.8(e).
21 Panel Report, paras. 9.62, 9.89, 9.93, 9.487(a), 9.487(c), 11.8(a)-(b), 11.8(e).
22 Panel Report, paras. 9.240, 9.241, 9.242, 9.243, 9.246, 9.250-9.252, 9.292, 9.293, 9.333-9.335,
9.379, 9.380, 9.383, 9.426, 9.446, 9.458, 9.477 (footnote 3433), 9.486(d), 9.487(a), 9.487(c), 11.8(a)-(b),
11.8(e).
23 Panel Report, paras. 9.271, 9.273, 9.277, 9.288, 9.291, 9.293, 9.297-9.298, 9.333-9.335, 9.470,
9.472, 9.474, 9.475, 9.476, 9.483, 9.484, 9.485, 9.486(c), 9.486(d), 9.487(a), 9.487(c), 11.8(a)-(b), 11.8(e).
24 Panel Report, paras. 9.271, 9.273, 9.277, 9.288, 9.291, 9.293, 9.297-9.298, 9.333-9.335, 9.470,
9.472, 9.474, 9.475, 9.476, 9.483, 9.484, 9.485, 9.486(c), 9.486(d), 9.487(a), 9.487(c), 11.8(a)-(b), 11.8(e).
25 Panel Report, paras. 9.271, 9.273, 9.277, 9.288, 9.291, 9.293, 9.297-9.298, 9.333-9.335, 9.470,
9.472, 9.474, 9.475, 9.476, 9.483, 9.484, 9.485, 9.486(c), 9.486(d), 9.487(a), 9.487(c), 11.8(a)-(b), 11.8(e).

applied on the 787-8/9, do not continue to cause adverse effects in the post-implementation
period.26
24. The Panel failed to make an objective assessment of the matter under Article 11 of the DSU,
when finding that the "technology effects" of the pre -2007 US aeronautics R&D subsidies,
which were found in the original proceedings to have accelerated the development of
technologies applied on the 787 -8/9, do not continue to cause adverse effects in the post -
implementation period.27
25. The Panel erred in the application of Articles 7.8, 5, and 6.3 of the SCM Agreement, when
finding, based exclusively on the counterfactual launch date of the 787 and without
consideration of the counterfactual timing of deliveries, that the "technology effects" of the
pre-2007 US aeronautics R&D subsidies do not continue in the post -implementation
period.28
26. The Panel failed to make an objective assessment under Article 11 of the DSU, when finding,
based exclusively on the counterfactual launch date of the 787 and without consideration of
the counterfactual timing of deliveries, that the "technology effects " of the pre -2007 US
aeronautics R&D subsidies do not continue in the post-implementation period.29
27. The Panel erred in the application of Articles 7.8, 5, and 6.3 of the SCM Agreement, when
finding, based on evidence regarding the time required to further develop and mature
certain technologies at already advanced stages of technolog y development , rather than
evidence regarding the time required to conduct early -stage fundamental R&D for such
technologies, that the "technology effects" of the pre-2007 US aeronautics R&D subsidies do
not continue in the post-implementation period.30
28. The Panel failed to make an objective assessment of the matter, under Article 11 of the
DSU, when finding, based on evidence regarding the time required to further develop and
mature certain technologies at already advanced stages of technology development , rather
than evidence regarding the time required to conduct early-stage fundamental R&D for such
technologies, that the "technology effects" of the pre-2007 US aeronautics R&D subsidies do
not continue in the post-implementation period.31
29. The Panel erred in the application of Articles 7.8, 5, and 6.3 of the SCM Agreement, when
finding, based on a failure to consider the proper sequence of technology development, that
the "technology effects" of the pre -2007 US aeronautics R&D subsidies do not continue in
the post-implementation period.32
30. The Panel failed to make an objective assessment of the matter, under Article 11 of the
DSU, when finding, based on a failure to consider the proper sequence of technology

26 Panel Report, paras. 9.128, 9.152, 9.153, 9.156, 9.157, 9.158, 9.161, 9.162, 9.163, 9.164, 9.165,
9.166, 9.170, 9.173, 9.176-9.177, 9.184-9.186, 9.197, 9.218-9.220, 9.333-9.335, 9.352-9.355, 9.373,
9.486(a), 9.487(a), 9.487(c), 11.8(a)-(b), 11.8(e).
27 Panel Report, paras. 9.128, 9.152, 9.153, 9.156, 9.157, 9.158, 9.161, 9.162, 9.163, 9.164, 9.165,
9.166, 9.170, 9.173, 9.176-9.177, 9.184-9.186, 9.197, 9.218-9.220, 9.333-9.335, 9.352-9.355, 9.373,
9.486(a), 9.487(a), 9.487(c), 11.8(a)-(b), 11.8(e).
28 Panel Report, paras. 9.128, 9.152, 9.153, 9.157, 9.161, 9.166, 9.170, 9.173, 9.176-9.177, 9.184-
9.186, 9.197, 9.218-9.220, 9.352-9.355, 9.373, 9.486(a), 9.487(a), 9.487(c), 11.8(a)-(b), 11.8(e).
29 Panel Report, paras. 9.128, 9.152, 9.153, 9.157, 9.161, 9.166, 9.170, 9.173, 9.176-9.177, 9.184-
9.186, 9.197, 9.218-9.220, 9.352-9.355, 9.373, 9.486(a), 9.487(a), 9.487(c), 11.8(a)-(b), 11.8(e).
30 Panel Report, paras. 9.128, 9.161, 9.162 (referring to paras. 9.136, 9.139), 9.163, 9.164, 9.176-
9.177, 9.184-9.186, 9.197, 9.218-9.220, 9.352-9.355, 9.373, 9.486(a), 9.487(a), 9.487(c), 11.8(a)-(b),
11.8(e).
31 Panel Report, paras. 9.128, 9.161, 9.162 (referring to paras. 9.136, 9.139), 9.163, 9.164, 9.176-
9.177, 9.184-9.186, 9.197, 9.218-9.220, 9.352-9.355, 9.373, 9.486(a), 9.487(a), 9.487(c), 11.8(a)-(b),
11.8(e).
32 Panel Report, paras. 9.128, 9.152, 9.161, 9.165, 9.166, 9.170, 9.173, 9.176-9.177, 9.184-9.186,
9.197, 9.218-9.220, 9.352-9.355, 9.373, 9.486(a), 9.487(a), 9.487(c), 11.8(a)-(b), 11.8(e).

development, that the "technology effects" of the pre-2007 US aeronautics R&D subsidies do
not continue in the post-implementation period.33
31. The Panel erred in the application of Articles 7.8, 5, and 6.3 of the SCM Agreement, when
accepting the United States ' estimate of the counterfactual launch date of the 787 on the
basis that the European Union did not "itself enumerate the specific additional tasks that
Boeing should have reflected in its assessment " and did "not provide evidence of how long
Boeing would have needed to conduct any of the R&D tasks that w ere actually performed
under the NASA and DOD aeronautics R&D programmes".34
32. The Panel failed to make an objective assessment of the matter, under Article 11 of the
DSU, when accepting the United States ' estimate of the counterfactual launch date of the
787 on the basis that the European Union did not "itself enumerate the specific additional
tasks that Boeing should have reflected in its assessment " and did "not provide evidence of
how long Boeing would have needed to conduct any of the R&D tasks that were actually
performed under the NASA and DOD aeronautics R&D programmes".35
33. The Panel failed to make an objective assessment of the matter, under Article 11 of the
DSU, when it misconstrued a European Union argument in the original proceedings, in
support of its finding that "the acceleration effect of the pre-2007 aeronautics R&D subsidies
in relation to Boeing 's technology development for the 787, has {not} continued into the
post-implementation period".36