EU says it has resolved 17-year air battle with the US

The European Union and the United States have resolved their nearly 17-year dispute over aircraft subsidies, the EU announced on Tuesday, ending a Trump-era tariff package that had soured relations between them.

The two sides have been fighting since 2004 in parallel cases at the World Trade Organization concerning subsidies granted to the American aircraft manufacturer Boeing (BA.N) and its European rival Airbus (AIR.PA).

They agreed in March to a four-month suspension of tariffs on $ 11.5 billion of goods ranging from EU wine to US tobacco and spirits, which they had imposed in response to the dispute. On Tuesday, they were to cut them for five years, while working on a comprehensive agreement on which subsidies to allow.

“This meeting started with a breakthrough on airplanes. It really opens a new chapter in our relationship as we move from litigation to cooperation on airplanes – after 17 years of conflict,” said European Commission President Ursula von der Leyen in front of an EU-US conference. summit with US President Joe Biden.

The deal should allow them to focus on the threat posed by China’s burgeoning commercial aviation industry.

It will also remove one of the two main trade irritants left by Donald Trump’s presidency, the other being tariffs imposed for national security reasons on imports of steel and aluminum from the EU.

The European Commission, which oversees EU trade policy, last month suspended for up to six months a threat to double retaliatory tariffs on June 1 on Harley-Davidson motorcycles, the American whiskey. and powerboats, and refrained from imposing tariffs on more American products, from lipstick to sports. shoes.

Brussels and Washington have said they will seek to address excess global capacity largely centered in China.

The United States might find it more difficult to remove tariffs on metals, which also apply to other countries like China, as they are still supported by many American metal producers and workers.

Brussels is also encouraging what is called a new “positive agenda” on trade with Washington, notably by forging an alliance to drive WTO reform.

The two are also likely to agree to cooperate on trade and technology, for example to establish compatible standards and facilitate trade in artificial intelligence.

Our standards: Thomson Reuters Trust Principles.

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