UNITED STATES – MEASURES AFFECTING TRADE IN LARGE CIVIL AIRCRAFT (SECOND COMPLAINT)
Document: 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
Date: 4 April 2011
Document codes: WT/DS353/8
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)

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
 (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 interpretations contained in the Panel 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 paragraphs 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.

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.
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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.
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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 reductions and instances of application are subsidies
contingent/conditional 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.
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