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1.
Introduction
A comprehensive analysis of this seminal Report ('the Airbus Report') will require more than one Ph.D. thesis: After all, we are talking of a Report that was more than nine months in the making (after a Panel had toiled on the case for five years), with three distinguished Appellate Body Members (Unterhalter, Bautista, Van den Bossche) and the Secretariat lawyers1authoring some 650 pages, with the operative part of the Report starting at page 270. For an institution that prides itself of its Swiss-watch precision (and distinguishes it from some panels) this is, if not a record, then at least one of the longer periods spent on an appeal. We shall not undertake, in the framework of this paper, to analyze in-depth all major issues addressed in the Report. Rather, we understand this small piece as an amuse bouche that is supposed to whet the appetite for more. Hence, we will limit ourselves to highlight certain aspects of the decision we consider particularly interesting and worthy of discussion.
It is to be reminded that the Airbus Report is part of the on-going Airbus-Boeing saga2, which also led, in 2012, to the Appellate Body Report United States - Measures Affecting Trade in Large Civil Aircraft - Second Complaint (WT/DS353) that will be reported next year: the United States and the European Union, respectively, claim that the other partner is unfairly subsidizing its producer of large civil aircrafts ('LCA').
The emergence of Airbus transformed the market structure of the LCA industry from that of a dominant incumbent with two fringe producers with a narrow product range into a duopoly of similar-sized full-range manufacturers. The financing of Airbus's important upfront investment expenditures came in a significant proportion from public funds. The rivalry between Boeing and Airbus on the global market has resulted in new product launches which, together with competition between the LCA manufacturers for orders, significantly increased global demand, but which has shown a relative decline in the preponderant position of Boeing.
The Airbus case was initiated by the United States in late 2004;3the Panel was established on 20 July 2005 and issued its Report some five years later on 30...