Boeing Subsidies Merit EU Tariffs on $4 Billion in U.S. Goods, WTO Rules -- Update
By Doug Cameron and Daniel Michaels
The World Trade Organization on Tuesday said the European Union
may impose tariffs on $3.99 billion in Boeing Co. jets and other
U.S. goods annually as part of a long-running trade dispute.
The ruling clears the way for the EU to respond to tariffs that
the trade body last October authorized the U.S. to impose on $7.5
billion in Airbus SE jets and other imported European products. In
2004, Washington took European countries to the WTO over subsidies
to Airbus, and Europe responded soon after with a case against U.S.
support for Boeing.
WTO rulings since then have found that both sides provided
prohibited subsidies, but Europe did so to a greater extent.
EU officials have said they hope to negotiate a settlement with
Washington, and many observers expect Europe to refrain from
levying tariffs quickly. The EU last year said it had prepared a
preliminary list of U.S. products to target for retaliation, if
EU Trade Commissioner Valdis Dombrovskis said on Twitter that he
"will immediately re-engage with the U.S. in a positive and
constructive manner to decide on next steps. Our strong preference
is for a negotiated settlement. Otherwise, we will be forced to
defend our interests & respond in a proportionate way."
Airbus said it supports any action the EU takes. The company is
"ready to support a negotiation process that leads to a fair
settlement," said Chief Executive Guillaume Faury. "It is time to
find a solution now so that tariffs can be removed on both sides of
The office of the U.S. Trade Representative didn't immediately
respond to a request for comment.
Boeing said it is disappointed that Airbus and the EU are
seeking tariffs on the U.S. "Rather than escalating this matter
with threats to U.S. businesses and their European customers,
Airbus and the EU should be focusing their energies on good-faith
efforts to resolve this long-running dispute," the company
Helping broker a deal over government aid for jetliners would be
a crucial victory for the WTO's efforts to build credibility as a
global arbitrator, even as the coronavirus pandemic amplifies
already-simmering trade spats. The 16-year jetliner dispute is the
longest in WTO history.
The U.S. last year introduced a 15% tariff on imported Airbus
jets and levies on other European products, following the largest
arbitration award in WTO history, according to the U.S. Trade
Representative. The EU could follow suit with levies on Boeing
planes if no deal can be reached.
The pandemic-driven decline in air travel has made many airlines
unwilling or unable to take most new aircraft deliveries, reducing
the current and potential impact.
Both sides have taken steps in recent months to defuse a dispute
that started in October 2004 and centers on government aid aimed at
assisting the launch of new jets such as the Boeing 787 and Airbus
A350 and A380.
The dispute spawned a series of claims, WTO rulings, concessions
and appeals that have colored broader trade relations between the
U.S. and the EU and led to tariffs on goods ranging from cheese to
Boeing earlier this year stepped away from tax breaks provided
by Washington state for 787 production. The company recently said
it planned to end assembly of the plane in the state and move it to
South Carolina. Airbus announced a deal in July with Spain and
France to change some financial-support agreements.
Both sides now maintain they are in full compliance with WTO
The dispute over aircraft subsidies has become an element of the
Trump administration's trade negotiations with Europe. The two
sides have been in formal negotiations since 2018 over a range of
issues but have made little progress.
Write to Doug Cameron at firstname.lastname@example.org and Daniel
Michaels at email@example.com
(END) Dow Jones Newswires
October 13, 2020 11:02 ET (15:02 GMT)
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