The proposed structure of launch funding for the Boeing 7E7 clearly violates global and plurilateral subsidy regulations, according to a new study by David Pritchard and Alan MacPherson of the Canada-United States Trade Center at the State University of New York. The authors contend that the nature of domestic and international funding for the proposed new programme ― in which Boeing is planning for unprecedented reliance on external risk-sharing partners ― fails to respect both the 1992 US-EU Agreement on Trade in Large Civil Aircraft and the 1994 WTO Agreement on Subsidies and Countervailing Measures (SCM). Not surprisingly, the conclusions of the study are strongly contested by Boeing, which says it continues to comply with applicable international legislation.According to the study, "if the proposed 7E7 development and production package proceeds according to plan, then it seems likely the USA will need to withdraw from the 1992 US-EU agreement." In addition, the authors note: "The 7E7 launch proposal involves several actionable subsidies [under the SCM agreement] that the European Commission can challenge, either through multilateral dispute settlement or through countervailing action in the event that these subsidies adversely affect the interests of EU members. The financial support from Japanese government for the 7E7 programme may also constitute prohibited subsidies as a result of them being export contingent."
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