The European Union has been allowed by the World Trade Organization to impose import tariffs on products from the United States worth $4 billion as a retaliatory measure to US tariffs on EU products over the WTO case of subsidies given to Boeing by the US government and to Airbus given by EU countries respectively, claimed reports quoting sources with knowledge of the matter.
This awarding of permission to imposed import tariffs could become a new source of a possible trade spat between the two parties weeks ahead of the presidential elections in the US in November.
Tariffs in relation to the same case had been initiated by the US against EU products and goods worth $7.5 billion since last year.
The dispute at the WTO over providing government subsidies to the two rival air craft makers has been ongoing for 16 years. Both the parties had filed cases against each other which turned out to be the largest corporate dispute ever in the world.
The two parties were informed about the WTO decision last weekend and would be published within weeks.
No comments on the issue were available from the US Trade Representative and the EU’s Washington office.
While declining ot make any comment on the confidential WTO report, Boeing accused Airbus of ignoring its recent decision to forgo tax breaks in Washington state in an effort to resolve the issue.
No comment from Airbus was available. Its own concessions on funding in France and Spain were recently announced by the European plane maker.
It is unlikely that the EU will impose any tariffs on products such as Boeing jets prior to the November 3 US presidential elections, said reports quoting sources in an effort of Brussels to avoid inflaming a bitter campaign.
However it is expected that both the sides in the trade case are likely to claim victory while the US could claim to have been awarded the higher core tariffs in favor of Boeing, said reports quoting sources.
The EU still has a leftover options of imposing tariffs on some $4.2 billion of tariffs against the United States from an earlier case which now takes the total worth of US good that the Eu can impose tariffs against to $8.2 billion, claimed the reports quoting sources.
However that additional tariff scope that is being claimed to be still available with the EU form a previous case was refuted by the United States which claimed that the law creating the disputed system was repealed in 2006 and hence it was not valid anymore. The previous case granted the EU authority to impose tariffs to retaliate against special tax treatment for US exporters which had never been implemented by the EU.
Ease years of deadlock will be brought to an end by the eagerly awaited ruling on EU counter-tariffs, said analysts.
“Everybody’s been waiting for this. It sets the stage for a negotiation,” said William Reinsch, a former senior U.S. Commerce Department official and trade expert at the Council on Strategic and International Studies
(Adapted from Business-Standard.com)