EU and US reach compromise deal to end Airbus-boeing trade dispute
The United States and the European Union have reached a deal to end a damaging dispute over subsidies to rival plane makers Boeing and Airbus and phase out billions of dollars in punitive tariffs, the US trade envoy said.
US trade representative Katherine Tai said the two sides have come to terms on a five-year agreement to suspend the tariffs at the centre of the dispute.
But she said they could be reimplemented if the US companies are not able to “compete fairly” with those in Europe.
“Today’s announcement resolves a long-standing irritant in the US-EU relationship,” Ms Tai said, as US president Joe Biden met with EU leaders in Brussels.
“Instead of fighting with one of our closest allies, we are finally coming together against a common threat.”
The trade dispute skyrocketed under the Trump administration, and saw tit-for-tat duties slapped on a range of companies that have nothing to do with aircraft production, from French winemakers to German cookie bakers in Europe and US spirits producers, among many others.
The US imposed what could have amounted to $7.5 billion in tariffs on European exports in 2019 after the World Trade
Organisation (WTO) ruled that the EU had not complied with its rulings on subsidies for Airbus, which is based in France.
The EU retaliated last November with up to $4bn in punitive duties after the WTO ruled that the US had provided illegal subsidies to Seattlebased Boeing.
In March, the two sides agreed to suspend the tariffs. That suspension started on 11 March and was due to last for four months. The new agreement will officially go into effect on 11 July.
European Commission president Ursula von der Leyen said: “This really opens a new chapter in our relationship because we move from litigation to co-operation on aircraft after 17 years of dispute.”
Both sides said they would also work together to analyse and address the “non-market practices of third parties that may harm our large civil aircraft sectors,” according to the EU’S executive branch.
Ms Tai said they would cooperate “to challenge and counter China’s non-market practices in this sector in specific ways that reflect our standards for fair competition.”
Airbus, which is headquartered in France but also has centres in Germany and Spain, welcomed the agreement. A spokesman said in a statement: “This will provide the basis to create a level playing field which we have advocated for since the start of this dispute.”
France’s finance and European affairs ministers also hailed the deal, saying in a joint statement: “We are now going to be able to focus on finally putting these differences behind us, and to define the conditions for fair competition on a global scale to support the aerospace sector.”
However, the deal does not end the Trump-era transatlantic trade row. The former US president also slapped duties on EU steel and aluminium. The EU retaliated by raising tariffs on products such as Us-made motorcycles, bourbon, peanut butter and jeans.