US and Europe end 17-year trade war over Boeing and Airbus

US announces five-year agreement with EU in Boeing and Airbus dispute

The United States and the European Union have agreed to end 17 years of trade conflict on account of their respective subsidies to their aircraft manufacturers Airbus and Boeing. The allies have imposed tariffs totaling $ 11.5 billion on exports, in the world’s longest trade dispute. The measure will alleviate other sectors affected by this conflict, such as oil, cheese or wine exporters

The European Commission would have spent, according to this agency, Monday night discussing the terms of the agreement with the member states, so that it can be approved before the EU-US summit in Brussels in which President Joe Biden will participate. The goal is to find a permanent solution before July 11 through bilateral treaties.

The historic agreement turns the page on a key conflict and sets the stage for a new era of transatlantic cooperation on state aid as China is vying to displace the Boeing-Airbus civil aviation duopoly. The deal has been driven, in fact, by the conviction among policy makers that the Chinese state-owned aerospace maker Commercial Aircraft Corporation, or Comac, is on the path of a legitimate rival to the historic commercial aviation duopoly.

“There is no doubt that the rise of the Chinese aviation industry of the Chinese aviation industry is on the radar of the whole world,” US Chamber of Commerce Vice President Marjorie Chorlins told reporters.

The dispute has dragged on since 2004, when the United States withdrew from a multilateral pact on aviation subsidies, dating back to 1992, and brought the EU to the WTO claiming that Airbus had matched Boeing’s market share thanks to subsidized government loans. . The EU fought back over what it called unfair R&D aid and subsidized tax incentives for Boeing. Trade conflicts between Europe and the US worsened during the presidency of Donald Trump.

In 2019, the World Trade Organization authorized the United States to impose tariffs on $ 7.5 billion annually of EU exports because of government support for Airbus. For its part, the EU obtained permission to counterattack with levies on $ 4 billion of US products. Both parties suspended the penalties in March while they negotiated the deal.

Penalties cover items ranging from airplanes and parts to tractors, wine, or cheese. In fact, the calculations indicated that the sanctions imposed by Washington punished 1,000 million euros in Spanish exports , mainly olive oil, wine and olives.

Brussels and Washington remain at odds over steel and aluminum tariffs, but today’s summit is expected to set a deadline until December 1 to end punitive tariffs related to this dispute, according to a draft of statement seen by Reuters.

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