Gov. Gregoire�s statement on WTO Appellate Body report

For Immediate Release: March 12, 2012

OLYMPIA � Gov. Chris Gregoire issued the following statement on the Appellate Body report on U.S. subsides for Boeing which was released today by the World Trade Organization:

�I�m pleased with today�s appellate ruling from the World Trade Organization. The WTO Appellate Body, for the most part, agreed with the dispute settlement panel report that came out last year and rejected nearly all of the European claims against Washington state. The result is that the infrastructure improvements that benefit all of our citizens, along with many of the practices we use to attract businesses to invest here, are not against WTO rules.

�The Appellate Body did find that the state�s decision in 2003 to reduce the B&O tax rate for aerospace manufacturing companies was a subsidy to Boeing. However, the Appellate Body found that the program was far less harmful than the Europeans alleged. Specifically, the Appellate Body determined that the reduction of the B&O tax rate did not harm sales of Airbus� larger aircraft. The only negative effect found was that Airbus lost just two sales in competition to the Boeing 737. This is in line with what we have always said � our tax policy here in Washington state aims to create a favorable climate for job retention and job growth. We are not seeking to harm any outside interests.

�We continue to work with the Office of the U.S. Trade Representative in Washington, DC, to determine how to respond to the Appellate Body report. Once the WTO adopts the decision � likely later this month � we will have six months in which to make that decision.�