The World Trade Organization’s preliminary finding that Airbus received illegal subsidies from European governments provides ammunition to Boeing Co.’s backers in Congress as they try to thwart Airbus’s bid in a U.S. defense contract.
Although the WTO case is far from a resolution, members of Congress say Friday’s ruling should be reflected in terms of the $40 billion competition to supply the Pentagon with tanker planes. Northrop Grumman Corp. is cooperating with Airbus parent European Aeronautic Defence & Space Co. in the tanker competition against Boeing.
Lawmakers’ efforts to stymie the Airbus tanker bid could violate global trade rules. The Government Procurement Agreement, a 1996 treaty signed by many developed countries, forbids signatories from discriminating against foreign companies in procurement deals for any reason other than the quality of a bid. But the treaty is weak and has rarely been enforced.
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