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 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 20(1) OF THE WORKING PROCEDURES FOR APPELLATE REVIEW
Document: 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
Date: 18 September 2017
Document codes: WT/DS353/28
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 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 20(1) OF THE WORKING PROCEDURES
FOR APPELLATE REVIEW
The following communication, dated 10 August 2017, 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 the Appellate Body of its decision to appeal certain issues of law covered in the
Report of the Panel in United States – Measures Affecting Trade in Large Civil Aircraft
(Second Complaint): Recourse to Article 21.5 of the DSU by the European Union ()
("Compliance Panel Report") and certain legal interpretations developed by the Panel.

1. The United States seeks review by the Appellate Body of the Panel 's finding that
European Union ("EU") claims regarding procurement contracts between the U.S. Department of
Defense ( "DoD") and The Boeing Company ( "Boeing") were within its terms of reference. This
conclusion is in error and is based on erroneous findings of law and related legal interpretations,
including an erroneous interpretation and application of Articles 6.2 and 21.5 of the Understanding
on Rules and Procedures Governing the Settlement of Disputes ("DSU"). The paragraphs relating
to these errors include paragraphs 7.111-7.131 and 11.5.a.ii of the Compliance Panel Report.
2. The United States appeals the Panel 's finding regarding the approximate rate of
subsidization per 737 MAX and 737NG, resu lting from the Washington State B&O tax rate
reduction. This finding is in error and is based on erroneous findings of law and related legal
interpretations, including an erroneous interpretation or application of Articles 5(c) and 6.3(c) of
the Agreement on Subsidies and Countervailing Measures ("SCM Agreement"). In the alternative,
the Panel failed to make an objective assessment of the matter before it, including an objective
assessment of the facts of the case and the applicability and conformity with t he relevant covered
agreements for purposes of Article 11 of the DSU. The paragraphs relating to these errors include
paragraphs 9.385, 9.395, and 9.402-9.403 of the Compliance Panel Report.
3. The United States appeals the Panel 's findings that the price di fference in the Air Canada
sales campaign was somewhat smaller than the price difference in the Icelandair 2013 sales
campaign, and that, in the concluding stages of the Air Canada 2013 sales campaign, Airbus
thought it was close enough to Boeing on price that relatively small improvements on price could
affect the outcome of the campaign. The Panel failed to make an objective assessment of the
matter before it, including an objective assessment of the facts of the case and the applicability
and conformity with the relevant covered agreements for purposes of Article 11 of the DSU. The
paragraphs relating to these errors include paragraph 9.403 of the Compliance Panel Report and
paragraph 264 of the HSBI Appendix to the Compliance Panel Report.

4. The United Sta tes appeals the Panel 's finding that the evidence regarding the price
differential in the Icelandair 2013 sales campaign was somewhat contradicted by other evidence,
which suggests that at the final stage, Airbus may have closed the gap. The Panel failed t o make
an objective assessment of the matter before it, including an objective assessment of the facts of
the case and the applicability and conformity with the relevant covered agreements for purposes of
Article 11 of the DSU. The paragraphs relating to t hese errors include paragraph 9.403 of the
Compliance Panel Report and paragraphs 247 and 250 of the HSBI Appendix to the Compliance
Panel Report.
5. The United States appeals the Panel 's finding that the European Union has established that
the effects of the Washington State B&O tax rate reduction are a genuine and substantial cause of
significant lost sales within the meaning of Articles 5(c) and 6.3(c) of the SCM Agreement of
A320neo and A320ceo families of LCA in the single -aisle LCA market, in respect of the sales
campaigns for Fly Dubai in 2014, Air Canada in 2013, and Icelandair in 2013, in the
post-implementation period. This conclusion is in error and is based on erroneous findings of law
and related legal interpretations, including an erroneous interp retation or application of
Articles 5(c) and 6.3(c) of the SCM Agreement. In addition, the Panel failed to make an objective
assessment of the matter before it, including an objective assessment of the facts of the case and
the applicability and conformity with the relevant covered agreements for purposes of Article 11 of
the DSU. The paragraphs relating to these errors include paragraphs 9.385, 9.395, 9.402 -9.404,
9.407, and 11.8(c) of the Compliance Panel Report.
6. The United States appeals the Panel 's finding that the European Union has established that
the effects of the Washington State B&O tax rate reduction are a genuine and substantial cause of
a threat of impedance of imports of the A320ceo to the United States single -aisle market, and a
threat of impedance of exports of Airbus single-aisle LCA in the United Arab Emirates third country
market, within the meaning of Articles 5(c) and 6.3(a) and (b) of the SCM Agreement in the
post-implementation period. This conclusion is in error and is based on erroneous findings of law
and related legal interpretations, including an erroneous interpretation or application of
Articles 5(c) and 6.3(c) of the SCM Agreement. The paragraphs relating to these erro rs include
paragraphs 9.385, 9.395, 9.402-9.404, 9.438, 9.443, 9.444, and 11.8(d) of the Compliance Panel
Report.
7. The United States conditionally appeals the Panel 's findings that post -2006 National
Aeronautics and Space Administration ( "NASA") procurement contracts and cooperative
agreements, DoD assistance instruments, and the Aviation Administration ( "FAA") Other
Transaction Agreement DTFAWA-10-C-00030 conferred a benefit on Boeing. These conclusions are
in error and are based on erroneous findings of la w and related legal interpretations, including an
erroneous interpretation and application of Article 1.1(b) of the SCM Agreement. In addition, the
Panel failed to make an objective assessment of the matter before it, including an objective
assessment of the facts of the case and the applicability and conformity with the relevant covered
agreements for purposes of Article 11 of the DSU. The paragraphs relating to these errors include
paragraphs 8.30, 8.44 -8.50, 8.176 -8.178, 8.181 -8.187, 8.408 -8.414, 8.533 -8.541, and
11.7(b)(i)-11.7(b)(iii) of the Compliance Panel Report. The United States only requests the
Appellate Body to address this issue if it modifies or reverses the Panel 's finding that subsidies
conferred through the measures referenced in this parag raph did not cause adverse effects under
Articles 5 and 6.3 of the SCM Agreement.
8. The United States conditionally appeals the Panel 's findings that subsidies conferred by the
NASA, DoD, and FAA measures referenced in paragraph 2 were specific subsidies. These
conclusions are in error and are based on erroneous findings of law and related legal
interpretations, including an erroneous interpretation and application of Article 2.1 of the
SCM Agreement. The paragraphs relating to these errors include paragraphs 8.210-8.211,
8.222-8.231, 8.460 -8.469, 8.547, 8.548 -8.533, and 11.7(b)(i) -11.7(b)(iii) of the Compliance
Panel Report. The United States only requests the Appellate Body to address this issue if it finds
that DoD procurement contracts create the same type of financial contribution as the measures
referenced in paragraph 2.
9. The United States conditionally appeals the Panel's finding that the State of South Carolina's
payment to Boeing of $270 million in Economic Development Bond and Air Hub Bond proceeds,
conferred a benefit to Boeing. The Panel failed to make an objective assessment of the matter
before it, including an objective assessment of the facts of the case and the applicability and

conformity with the relevant covered agreements for purposes of Ar ticle 11 of the DSU. The
paragraphs relating to these errors include paragraphs 8.823, 8.849, and 11.7(b)(ix) of the
Compliance Panel Report. The United States only requests the Appellate Body to address this issue
if it modifies or reverses the Panel 's fi nding that subsidies conferred through the measures
referenced in this paragraph did not cause adverse effects under Articles 5 and 6.3 of the
SCM Agreement.
10. The United States conditionally appeals the Panel's finding that the EU 's claim of A330 price
suppression did not fail as a matter of law, despite that the EU failed to allege that the A330 is "in
the same market " as an allegedly subsidized product. This conclusion is in error and is based on
erroneous findings of law and related legal interpretations, including an erroneous interpretation or
application of Articles 5(c) and 6.3(c) of the SCM Agreement. The portions of the compliance Panel
report rela ting to these errors include footnote 3173. The United States only requests the
Appellate Body to address this issue if it modifies or reverses Panel findings regarding the EU 's
claim of adverse effects suffered by the A330.