EU and US suspend tariffs after ending dispute over subsidies to Boeing and Airbus




The European Union and the United States have reached an agreement to end nearly two decades of dispute due to the respective subsidies to Airbus and Boeing, a commercial tension that had led to a tariff battle for which key exports from each bloc were taxed with billions of euros. The commitment to end this conflict will be reflected in a joint declaration of the United States and the EU that collect the “multi-year” roadmap to resolve differences, as confirmed by community sources.

The consensus is announced coinciding with the visit of the president of the United States, Joe Biden, to Brussels, where this Tuesday he participates in a bilateral summit United States-EU together with the president of the European Commission, Ursula von der Leyen, and the President of the Council, Charles Michel. The document to be signed by Biden, Von der Leyen and Michel was already presented the day before to the ambassadors of the Twenty-seven and implies a suspension of all tariffs for a period of five years, as well as a series of “compromises” to pave the way for a definitive solution, the sources explain.

“Today’s meeting begins with a breakthrough in aeronautics. It really opens a new chapter in our relations because we went from fighting to cooperating on aircraft, after 17 years of dispute, “celebrated the head of the Community Executive, Ursula von der Leyen, in a statement distributed by her team.

Five-year suspension

The agreement will ensure that Europeans and Americans compete “on equal terms” and allows “to turn the page, work together to address the unfair and coercive practices that concern us both and ensure fair competition standards,” as said, for its part, the head of trade in the United States, Katherine Tai. However, Tai has specified that although the agreement implies the suspension of rates for a period of five years, in practice, the United States will maintain such a suspension “as long as the EU’s support for Airbus will be consistent with the terms of the agreementTherefore, it reserves the power to reactivate taxes if it considers that fair competition is being violated.

The The threat they see in China is also an element that has united the EU and the United States in this caseTherefore, the parties agree to work together to face unfair practices and to counteract the entry of investors from the Asian giant into European and American aeronautics. The first step to reduce tensions was taken last March, when the two parties agreed to suspend the tariffs for a period of four months, in order to facilitate negotiation.

Based on the agreement, both parties have agreed on a series of general principles that should guide mutual cooperation in the large civil aircraft sector. To this end, the creation of a joint EU-US working group to resolve any disagreement that may arise between the parties in a friendly and collaborative manner. Furthermore, this working group is entrusted with the task of further developing the principles and disciplines on which this mutual cooperation is based.

Finally, the agreement contains an annex on cooperation in relation to non-market economies, in order to promote collaboration between the US and the EU in the joint analysis and treatment of non-commercial practices of third countries that may harm their respective industries of large civil aircraft.

“A historic step”

The Minister of Industry, Trade and Tourism, Reyes Maroto, stressed that “the agreement reached represents a historic step to end the longest trade conflict within the WTO and to eliminate definitively tariffs that have weighed down on the Spanish aeronautical and agri-food industry, as well as being able to recover Spanish export and investment operations in the US market, which is key for our companies and for the recovery of the Spanish economy ”.

For his part, the Minister of Agriculture, Fisheries and Food, Luis Planas, has welcomed this announcement that “unfairly” taxed Spanish agri-food exports to the United States, including olive oil, wine, cheeses and citrus fruits. This is great news. We are back on the path of multilateralism that should never have been neglected. Dialogue, collaboration and the search for consensus must prevail over unilateral actions that generate imbalances and unnecessary trade conflicts.

The first to tax the other’s exports was the United States, when then-President Donald Trump announced tariffs worth 7.5 billion dollars (about 6.1 billion euros) with the backing of the WTO. The EU responded a year later by imposing tariffs on US products worth 4 billion dollars (about 3.3 billion euros).

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