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U.S. Ends Aviation Dispute With the European Union

Estados Unidos pone fin a la disputa comercial aeronáutica con la Unión Europea

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[Leer en español]

The United States and the European Union have ended the trade dispute between American Boeing and European Airbus through an agreement extending the suspension of tariffs for a period of five years, U.S. Trade Representative Katherine Tai announced today.

In a telephone call with reporters, Tai said that the agreement provides for extending the suspension of mutual tariffs for five years, starting July 11.

Even so, the American official indicated that her country will maintain the suspension “as long as the EU’s support for Airbus is consistent with the terms of the agreement”, i.e. that it does not cross any “red lines and US manufacturers can compete fairly.”

Tai explained that both sides have agreed, within the framework of this pact, to be clear about what is “acceptable support for large civil aircraft manufacturers” and to engage in a cooperative process to address that support.

Another point of the US-EU arrangement is “overcoming differences vis-à-vis China.”

In that regard, both sides have pledged to collaborate in a “meaningful way to confront investments in the aerospace sector by non-market players in our economies,” Tai said.

The Airbus-Boeing dispute is one of the longest in the history of the World Trade Organization (WTO): It began in 2004 when the complaint process began over subsidies granted by both parties to these two large companies.

The WTO declared those subsidies illegal and in 2019 allowed former US President Donald Trump (2017-2021) to impose retaliatory measures on EU products worth $7.5 billion (€6.172 billion).

A year later, the EU responded with tariffs on US exports valued at $4 billion (€3.292 billion).

Last March, the U.S. and the EU agreed to suspend those tariffs for four months, until July 11, to allow time to negotiate a solution.

The dispute between the two had affected 113 product categories of the Spanish food and beverage industry that represent 53.1% of the products exported to the United States, and which are among the 20 most sold products to that country, according to the platform of sectors affected by the tariffs.

Exports of these agri-food products have fallen sharply between November 2019 and February 2021, the period in which such tariffs were applied, compared to the tariff-free period from November 2017 to February 2019.

The U.S. announcement came shortly before President Joe Biden, who is in Brussels, takes part in a summit between his country and the EU, before leaving for Geneva to meet his Russian counterpart, Vladimir Putin, on July 16.

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