The European Union is considering raising the pressure on the United States in the world's largest trade dispute by challenging tax breaks that encouraged plane maker Boeing to keep production of its latest jet in Washington state.
Boeing has received $8.7 billion dollars in tax breaks from the state of Washington for production of its latest jet, the 777x, and European rival Airbus on the eve of the Berlin Airshow ILA described the tax breaks as "unacceptable".
The potential move would open a tense new phase in the decade-old formal trade dispute over aircraft industry aid, as Brussels and Washington argue about whether they have complied with rulings by the World Trade Organization, which in turn could set the tone for sanctions.
Both the EU and United States claimed victory when the WTO ruled between 2010 and 2012 against billions of dollars of support for Boeing and European rival Airbus , in a pair of cases spanning thousands of pages but lacking a final resolution.
"This is an additional distortion of the competition rules," Frederic Cuvillier, the French minister for transport, seas and fisheries, told journalists at the Berlin ILA Airshow.
British business minister Michael Fallon said he had already raised the issue with the U.S. Department of Commerce and Boeing during a trip to Seattle last month.
Boeing has responded by saying that the tax breaks are available to all aerospace companies operating in the state.
Production of the massive 777x plane is set to begin in 2017 and final completion of the first order will be around 2020 if there are no delays.
Washington state lawmakers are currently in session to talk about the tax breaks due to another matter -- without putting in provisions to guarantee jobs with the tax breaks some law makers have felt the company took advantage of the breaks by offering low wage jobs along with moving others to different states.
Boeing released a statement on the specifications of the new plane that has already had half-a-dozen orders placed .
"The 777X will be the largest and most-efficient twin-engine jet in the world, with 12 percent lower fuel consumption and 10 percent lower operating costs than the competition. The family includes the 777-8X and the 777-9X – both designed to respond to market needs and customer preferences. Like the 787 Dreamliner which was launched as the 7E7, the 777X will be formally named at a later date."