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WTO clears US tariffs on EU goods in Airbus retaliation
04 Oct '19
2 min read
Pic: Airbus
The World Trade Organisation (WTO) recently gave the United States the permission to impose tariffs on $7.5 billion worth of European Union (EU) goods in retaliation for its illegal support of Airbus. Washington in 2004 had accused Britain, France, Germany and Spain of providing illegal subsidies and grants to support the production of a range of Airbus products.
The EU immediately threatened to respond to any US move. "If the US decides to impose WTO authorised countermeasures, it will be pushing the EU into a situation where we will have no other option than do the same," Brussels said in a statement.
The ruling is the largest arbitration award in the history of WTO and is being considered a landmark in the 15-year long Airbus-Boeing battle, which threatens to intensify the already strained US-EU trade ties. The US tariffs could be in place by the end of the month.
But the EU will also soon get the chance to impose its own WTO-approved tariffs.
In a separate case launched in 2005, the EU alleged that Boeing had received $19.1 billion worth of prohibited subsidies from 1989 to 2006 from various branches of the US government.
After earning a series of victories in that equally epic case, Brussels asked a WTO arbitrator to give it permissions to slap retaliatory tariffs on $12 billion in US goods. The WTO is likely to decide on a lower number in a decision expected in about six months time, according to a news agency report.
The Europeans in July made a proposal to call a truce in which both sides would admit fault and figure out ways to curtail airline subsidies. The EU and US have reached such settlements in the past.
EU trade commissioner Cecilia Malmstrom said this week that there had not yet been a positive response to that proposal, but that the bloc would continue to pursue a deal that avoided further tariffs and deterioration in trans-Atlantic trade.
The EU immediately threatened to respond to any US move. "If the US decides to impose WTO authorised countermeasures, it will be pushing the EU into a situation where we will have no other option than do the same," Brussels said in a statement.
The ruling is the largest arbitration award in the history of WTO and is being considered a landmark in the 15-year long Airbus-Boeing battle, which threatens to intensify the already strained US-EU trade ties. The US tariffs could be in place by the end of the month.
But the EU will also soon get the chance to impose its own WTO-approved tariffs.
In a separate case launched in 2005, the EU alleged that Boeing had received $19.1 billion worth of prohibited subsidies from 1989 to 2006 from various branches of the US government.
After earning a series of victories in that equally epic case, Brussels asked a WTO arbitrator to give it permissions to slap retaliatory tariffs on $12 billion in US goods. The WTO is likely to decide on a lower number in a decision expected in about six months time, according to a news agency report.
The Europeans in July made a proposal to call a truce in which both sides would admit fault and figure out ways to curtail airline subsidies. The EU and US have reached such settlements in the past.
EU trade commissioner Cecilia Malmstrom said this week that there had not yet been a positive response to that proposal, but that the bloc would continue to pursue a deal that avoided further tariffs and deterioration in trans-Atlantic trade.
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