U.S., U.K. Aim to Reach Boeing-Airbus Truce After EU Deal
U.S., U.K. Aim to Reach Boeing-Airbus Truce Following EU Deal
(Bloomberg) -- The U.S. and U.K. are looking to reach a truce Wednesday in a trade dispute involving Airbus SE and Boeing Co. after the Biden administration and the European Union agreed to suspend tariffs on $11.5 billion of each other’s exports for five years.
The nations will look to hash out a pact when U.S. Trade Representative Katherine Tai visits London and meets with U.K. International Trade Secretary Liz Truss, according to people familiar with the plans, who weren’t authorized to speak publicly. The two sides see the goal as feasible given the similarities between the U.K. and EU positions, the people said.
In a statement, the U.K.’s Department for International Trade said it’s been working hard to de-escalate the dispute, and looks forward to Tai’s visit as a chance to reach a fair and balanced settlement.
The press office of the USTR declined to comment.
While the U.S. reached a framework in the longstanding aircraft-subsidy dispute with the EU on Tuesday, it needs to negotiate a separate resolution with London after the U.K. left the EU last year.
The transatlantic allies are trying to resolve their trade differences so they can take a common stance against China’s state-backed advances in global commerce.
Tai said in an interview with Bloomberg News and a few other media organizations on Tuesday that its agreement with the EU was meant to “confront squarely the threats that we experience and will experience from China’s ambition to build an aircraft sector on non-market practices.”
The U.S.-EU deal, announced in Brussels on Tuesday, includes a five-year EU commitment not to reinstate its duties on $4 billion worth of U.S. goods like tractors, video games and rum produced by Caterpillar, Microsoft and Bacardi.
In return, the U.S. is withdrawing for five years its tariffs on $7.5 billion worth of European food and luxury items, like Champagne, cognac and leather goods produced by LVMH Moet Hennessy Louis Vuitton, Givenchy, Hermes, Remy Cointreau and Pernod Ricard.
In addition to suspending tariffs, the EU and U.S. have agreed to create a working group to analyze bilateral disagreements and develop principles and appropriate actions; commit to provide transparent information on the funding for R&D in the sector; and jointly address non-market practices of countries like China.
The U.S. in March suspended tariffs with the U.K. and then the EU for four months -- a period that runs through early July -- to create space to negotiate a long-lasting solution.
The WTO had ruled that the governments of Germany, France, Spain and the U.K. provided Airbus with illegal subsidies through launch-aid loans for aircraft development, equity infusions, debt forgiveness and various other financial contributions.
The Geneva-based trade body also ruled that in the U.S., Boeing benefited from illegal subsidies through a since-withdrawn Washington state business and occupation tax break. The WTO in 2019 authorized the U.S. to retaliate with tariffs against $7.5 billion worth of EU exports annually, and in October 2020 the EU won permission to strike back with annual tariffs on $4 billion of U.S. goods.
©2021 Bloomberg L.P.
