Business & Investment

U.S. and EU agree to ceasefire in 17-year Reuters aircraft subsidy dispute

© Reuters. File Photo: The Airbus A350 jet airliner will fly over the Boeing flag after the flight exhibition at the 51st Paris Air Show held at Le Bourget Airport near Paris on June 15, 2015.Reuters / Pascal Rossignol / File Photo


Philip Blenkinsop

Brussels (Reuters)-The United States and the European Union have agreed to suspend tariffs during the Trump era, which has exacerbated their relationship, for five years in a nearly 17-year dispute over aircraft subsidies.

Since 2004, both sides have been competing in parallel with the World Trade Organization for a grant to US aircraft manufacturer Boeing (NYSE :) and European rival Airbus.

In March, they agreed to a four-month suspension of tariffs on $ 11.5 billion commodities ranging from WTO-approved EU cheese and wine to US tobacco and spirits. So far, companies have paid more than $ 3.3 billion in obligations.

On Tuesday, they said they would eliminate tariffs for five years while working on a comprehensive agreement on subsidies envisioned in March.

“This agreement has settled the conflict between Airbus and Boeing,” EU trade director Valdis Donbrokis said in a EU-US summit meeting with US President Joe Biden.

US Trade Representative Katherine Tai said both sides had agreed on a clear statement on what support could be given to large commercial aviation producers. She said they would also work to counter the investment in aircraft by “non-market players,” especially referring to China.

“We promised meaningful cooperation,” she said.

The United States and the European Union have set up working groups on this issue to fund market conditions, remain transparent about R & D funding, avoid support that harms the other side, and “non-market” elsewhere. We have agreed to work together to address “practices”. ..

Airbus said it welcomed a ceasefire to end the “losing” tariffs that were also imposed on planes.

Britain’s waiting, long stay in steel conflict

Britain, a former EU member state that was also involved in the conflict as the home of Airbus production, said it wanted a similar deal within a few days. Thailand will meet her British counterpart Liz Truss on Wednesday.

The EU-US agreement removes one of the two major trade stimuli left from President Donald Trump’s presidency, the other for national security reasons for EU steel and aluminum imports. This is the customs duty imposed.

The European Commission, which oversees EU trade policy, threatened to double tariffs on Harley-Davidson (NYSE :) motorcycles, US whiskey and motorboats on June 1, and said it would flatten tariffs on US products. Withheld. From lipstick to sports shoes.

Brussels and Washington said they would try to deal with excess global steel production capacity, mainly in China.

The United States may find it difficult to eliminate metal tariffs that also apply to other countries such as China. Because they are still supported by many US metal producers and workers.

Brussels is also promoting what is called a new “positive agenda” on trade with Washington, including building alliances to promote WTO reform.

Both sides may also agree to cooperate in trade and technology, such as setting compatible standards and promoting trade in artificial intelligence.

U.S. and EU agree to ceasefire in 17-year Reuters aircraft subsidy dispute U.S. and EU agree to ceasefire in 17-year Reuters aircraft subsidy dispute

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