A World Trade Organization (WTO) appeals panel on Wednesday upheld an earlier ruling that Airbus got illegal subsidies from European Union (EU) governments to build all its aircraft.

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A World Trade Organization (WTO) appeals panel on Wednesday upheld an earlier ruling that Airbus got illegal subsidies from European Union (EU) governments to build all its aircraft.

However, the panel softened the original finding by saying that loans for the Airbus A380 superjumbo jet, while illegal, were less egregious than initially found.

It also reversed part of the previous ruling by excluding from its list of illegal subsidies a variety of specific government funding projects totally about $3.6 billion.

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Nevertheless, the appeals panel confirmed that upfront “launch aid” loans to every Airbus jet program, totaling some $15 billion, were illegal and that the European Union must “take appropriate steps to remove the adverse effects.”

The mixed decision allowed both Brussels and Washington to claim a victory of sorts in their tit-for-tat dispute over financial aid to airplane manufacturers, a conflict that has become the costliest and most complex ever to be heard by the international trade body.

U.S. Trade Representative Ron Kirk said the ruling confirms the key contention of the U.S.

“None of the launch aid provided to Airbus is consistent with Europe’s WTO obligations,” Kirk said in a statement from Washington. “The message is clear: launch aid is illegal, and the European Union and the member states should refrain from future launch aid disbursements.”

Boeing spokesman Tim Neale said that, “The main target for Boeing all along by far has been launch aid and that finding was upheld.”

But EU Trade Commissioner Karel De Gucht said he was “particularly pleased” that appellate judges determined that launch aid for the A380 wasn’t a prohibited subsidy.

“The U.S. central claim that Airbus received prohibited export subsidies has been dismissed,” he said in Brussels. “In addition, a number of claims, relating to R&D and infrastructure among others, were either rejected or only partially accepted.”

The finding that A380 launch aid provided by Germany, Spain and the U.K. is not a “prohibited” export subsidy — considered to be the most blatant form of aid, and one that must be addressed within 90 days — gives the European plane maker more time. The remedies for subsidies that are illegal but not “prohibited” don’t have to be implemented on as tight a deadline.

Yet Airbus is still required to remove the adverse effects of its launch aid subsidies within about six months. If it doesn’t do so, the U.S. will go back to the WTO to determine the level of economic harm.

Later, after a long process of argument and counter-argument, that could lead to the U.S. imposing trade sanctions against the EU for an amount equivalent to the damages.

The EU appeal covered almost the entire case against Airbus subsidies, from launch aid for the A380 to infrastructure provisions and R&D funding that the U.S. says together amounted to $18 billion.

The appellate judges reversed the original panel findings related to less than $4 billion of that. It ruled that a French government equity infusion, infrastructure projects in France and Germany, and all R&D programs in the 27-nation EU are compatible with global trade law.

The appeals judges also backed the original panel’s finding that any support for Airbus’s A350, which will challenge Boeing’s 787 and 777, is outside the scope of this particular case.

Boeing and the U.S. government called on Airbus, a unit of EADS, to comply with the WTO ruling.

“We want them to do what the WTO requires them to do,” Tim Reif, general counsel for Kirk’s office, said at a press briefing. “Within six months of the date of adoption of this report, they are to withdraw these subsidies or to eliminate their adverse effects.”

But Airbus, which has said consistently that the dispute will probably drag on for years and that a negotiated settlement is the only way to resolve it, remained defiant.

“We see no significant consequences for Airbus or the European support system from today’s decision,” said Rainer Ohler, Airbus’ Head of Public Affairs and Communications.

The ruling is the latest in an almost seven-year legal battle over aid to Airbus and Boeing, the world’s two biggest commercial plane makers.

In a parallel case against Boeing, WTO judges concluded in March that Boeing received at least $5.3 billion in illegal U.S. support, unfairly tilting the $70 billion civil-aviation industry. Both the EU and U.S. appealed that judgment.

The twin reports, finding that both aircraft makers got illegal subsidies, may eventually establish industry-defining guidelines for government support that become even more important as competitors from China, Russia, Brazil and elsewhere emerge.

This report contains information from Seattle Times aerospace reporter Dominic Gates, Bloomberg News and The Associated Press.