For the U.S., EU and U.K., finding a path to resolving the long-running dispute on civil aircraft subsidies is a major priority. Both the U.S. and the EU have been authorized to retaliate by the WTO in recent years. Some efforts at finding a resolution were pursued during the Trump Administration. The Biden Administration has made it clear that it wants to find ways to work with our allies and resolving the underlying civil aircraft dispute has been a topic covered by President Biden’s USTR nominee Katherine Tai in her confirmation hearing. SeeMarch 2, 2021, Katherine Tai, USTR designate, on addressing WTO reform including dispute settlement if confirmed; the USTR 2021 Trade Policy Agenda, https://currentthoughtsontrade.com/2021/03/02/katherine-tai-ustr-designate-on-addressing-wto-reform-including-dispute-settlement-if-confirmed-the-ustr-2021-trade-policy-agenda/.
Today the U.S. and the United Kingdom released a joint statement following agreement to suspend retaliatory tariffs for four months from March 4, 2021 to provide space for seeking a negotiated solution. The U.K. had suspended retaliatory tariffs since January 1st. See USTR, Joint US-UK Statement on Suspension of Large Civilian Aircraft Tariffs, March 4, 2021, https://ustr.gov/about-us/policy-offices/press-office/press-releases/2021/march/joint-us-uk-statement-suspension-large-civilian-aircraft-tariffs. The joint statement is embedded below.
The announcement does not include the EU as a party, but it is expected that the EU will join such action since they are the major European party and face the largest amount of retaliation. In early December 2020, during the last months of the Trump Administration, EC Trade Commissioner Valdis Dombrovskis had indicated the EU would suspend retaliatory tariffs if the U.S. did as well. See Bloomberg, EU Says Boeing-Airbus Dispute Can Be Settled Under Trump, December 3, 2020, https://www.bloomberg.com/news/articles/2020-12-03/eu-says-boeing-airbus-dispute-can-be-settled-under-trump (“EU Trade Commissioner Valdis Dombrovskis said ‘it’s possible’ that both sides will reach an agreement by Jan. 20 governing aid to Boeing Co. and Airbus SE. He reiterated an offer to remove EU retaliatory tariffs on $4 billion of American goods if the U.S. does the same for its duties on $7.5 billion of European products. ‘The solution which would be preferred by the EU would be that both sides withdraw or at least suspend their tariffs and we reach agreement on future disciplines in the area of civil aviation,’ Dombrovskis said in an interview with Bloomberg TV on Thursday. ‘We are still intensively engaged with the current U.S. administration.’”).
The U.S. goal is certainly to find a solution that works for the Boeing Company and that permits the U.S., EU and U.K. to turn their attention to the challenges in the civil aircraft industry by major new entrants like China. Today’s action with the U.K. is the first step in the Biden Administration’s efforts to get this dispute resolved.
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