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USTR initiates response to EU aircraft subsidies

14
Apr '19
USTR initiates response to EU aircraft subsidies
The Office of the US Trade Representative (USTR) recently started the process to identify European Union (EU) products on which additional duties may be slapped till the EU lifts subsidies to Airbus that, according to the World Trade Organisation (WTO), have adversely hit the country. USTR released a list of such EU items, including textiles and apparel, for public comment.

USTR estimates the harm from the EU subsidies as $11 billion in trade each year, according to a press release from the office. The amount is subject to an arbitration at the WTO, the result of which is expected to be issued this summer.

“This case has been in litigation for 14 years, and the time has come for action. The Administration is preparing to respond immediately when the WTO issues its finding on the value of US countermeasures,” said U.S. Trade Representative Robert Lighthizer.

The preliminary list released includes varieties of sweaters, pullovers, sweatshirts, waistcoats, woollen men’s suits, women’s nightdresses and swimwear, bed linen, blankets, carpets, rugs, and cotton and polyester yarn.

Once the WTO arbitrator issues its report on the value of countermeasures, USTR will announce a final product list covering a level of trade commensurate with the adverse effects determined to exist.

“Our ultimate goal is to reach an agreement with the EU to end all WTO-inconsistent subsidies to large civil aircraft. When the EU ends these harmful subsidies, the additional US duties imposed in response can be lifted,” Lighthizer said.

After many years of seeking unsuccessfully to convince the EU and four of its member states—France, Germany, Spain and the United Kingdom—to cease their subsidisation of Airbus, the United States challenged the process at WTO in 2004. In 2011, the WTO found that the EU provided Airbus $18 billion in subsidized financing from 1968 to 2006.

In particular, the WTO found that European ‘launch aid’ subsidies were instrumental in permitting Airbus to launch every model of its large civil aircraft, causing Boeing to lose sales of more than 300 aircraft and market share throughout the world.

In response, the EU removed two minor subsidies, but left most of them unchanged. (DS)

Fibre2Fashion News Desk – India


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