MIAMI – It all began in 2004 when Boeing and Airbus entered into a dispute on state subsidies with cross accusations that they were illegally obtained.
The dispute was fought at the WTO (World Trade Organization) court, and slowly evolved into an open tariffs war which hit not only aeronautical products, i.e. aircraft, but a long list of various goods stretching from industrial products from Germany, car excepted, to food products such as Parmesan cheese, wine, and olive oil from France, Italy, and Spain.
The value of goods subject to tariffs was set at 7.5bn by the US and up to 4.5bn by the European side with a percent rate going from 10% on aircraft export/import to 25% on other goods.
A Beneficial Side-effect of Brexit
According to La Libre Belgique, a Belgian newspaper, following an agreement on trade tariffs between the US and the United Kingdom announced on March 4, a similar decision was jointly announced by the United States President, Joe Biden, and the President of the European Commission, Ursula von der Leyen.
The new initial agreement is to last for four months with the final objective, as stated by Ursula von der Leyen, “to attain a new partnership on economics between the EU and the US, based on common principles and values”
The Office of the United States Trade Representative (USTR) issued a joint statement reading “the European Union and the United States today agreed on the mutual suspension for four months of the tariffs related to the World Trade Organization (WTO) Aircraft disputes. The suspension will cover all tariffs both on aircraft as well as on non-aircraft products and will become effective as soon as the internal procedures on both sides are completed.
“This will allow the EU and the US to ease the burden on their industries and workers and focus efforts towards resolving these long running disputes at the WTO.
“The EU and the US are committed to reach a comprehensive and durable negotiated solution to the Aircraft disputes. Key elements of a negotiated solution will include disciplines on future support in this sector, outstanding support measures, monitoring and enforcement, and addressing the trade distortive practices of and challenges posed by new entrants to the sector from non-market economies, such as China.
“These steps signal the determination of both sides to embark on a fresh start in the relationship.”
Featured image: Ryan Scottini/Airways