Boeing received illegal tax breaks, says World Trade Organisation

American aircraft giant Boeing (NYSE: BA - news) has been receiving subsidies from the US state of Washington that are illegal under competition law, the World Trade Organisation (WTO) has ruled.

The WTO panel said the subsidies, which rival company Airbus says are worth $8.7bn (£7bn) and due to continue until 2040, encouraged the use of domestic materials and therefore unfairly distorted trade.

Boeing and Washington State have been told to end the subsidies within the next 90 days, but WTO decisions are not binding.

The organisation can, however, approve retaliatory measures that would pressure the parties involved into complying with its rulings.

Boeing has said it expects the United States to appeal the judgement.

Today's decision marks the latest chapter in a long-running dispute between rivals Airbus and Boeing about the support each gets from various governments and agencies.

The EU was also recently reprimanded by the World Trade Organisation for failing to abide by an earlier ruling instructing it to withdraw several subsidies it offers to Airbus, which is based in France.

Boeing says the EU support in question in that case, which mainly took the form of subsidised loans, was worth about $22bn.

But Airbus says it has already lost an estimated $50bn in sales thanks to the unfair advantages Boeing receives from the US.

Yet another dispute over US support to Boeing is still being investigated, with the WTO expected to rule on that case in the coming months.