COMAC: A WTO Complaint Waiting to Happen
When you study WTO law in school, it’s difficult to avoid the names of two corporations when you hit the area of government subsidies. Those companies are, of course, Boeing and Airbus, which have been going after each other for many years through their respective government proxies.
These are not easy cases. Some subsidies that target exports are quite easy to spot and label as trade distortive. Others are more insidious and have an indirect effect on export prices. Indirect subsidies, classic examples include subsidized loans and military expenditures, make for lovely appellate cases and classroom discussions, but really they are a big pain in the ass, contribute to political friction, and cost a lot of time and resources to litigate.
So that’s Airbus and Boeing. Now we have a new kid on the block.
The chief designer of the country’s first C919 jumbo jet has urged authorities to establish a multi-billion-yuan State fund to help boost the sales of homegrown airplanes.
More financial support from the government will bolster the domestic aviation industry, which is facing strong competition from foreign players such as Boeing and Airbus, said Wu Guanghui, vice-president of the Commercial Aircraft Corporation of China Ltd (COMAC).
Given the track record of the other two companies in this area, not to mention China’s somewhat spotty record when it comes to improper and nontransparent subsidies, you can bet that Boeing and Airbus have their legal teams on standby. One assumes that someone on the USTR China team (and his EU counterpart) has a small but rapidly growing folder on COMAC to be used — just in case — for future dispute resolution.
It’s like watching a trade law train wreck.






