With Eyes On A Quick Post-Brexit Trade Deal, UK Abandons EU Tariffs On Boeing

Tariffs imposed of the United States based plane maker Boeing have been dropped by the United Kingdom in the hope that it will be able to secure a trade agreement with the US faster after Brexit.

This move by the UK is in complete opposition to the EU which had imposed retaliatory tariffs on US imports worth $4bn following a ruling by the World Trade Organization (WTO) allowing the EU to impose them over charges that Boeing had been awarded illegal state aid.

The trade dispute between the EU and the US over charges of the illegal state aid to the European plane maker Airbus, just like that for Boeing, went on for more than a decade at the WTO. In a previous ruling, the WTO had awarded the US the permission to impose tariffs on EU products as it had found that EU governments – including the UK, France and Germany, had given state aid to Airbus in an illegal manner.

Among the UK products that had been impacted by a 25 per cent import tariff by the US include Scotch whisky and woollen jumpers and pullovers.

The aim of the latest move by the UK was aimed at normalising relations between the UK and the US, the government acknowledged, with the president-elect, Joe Biden, set to take charge of the White House in January.

The decision was “an effort to bring the US towards a reasonable settlement and show that the UK is serious about reaching a negotiated outcome”, said UK’s Department for International Trade.

However since the WTO ruling had not accounted for the UK leaving the EU, therefore continuation of the EU tariffs by the UK even after Brexit could have resulted in a legal challenge from the US.

The opportunity for a quick free trade deal with the US has been touted by UK prime minister Boris Johnson as well as many senior Conservative politicians as one of the crucial aims of the UK after it regains full control of trade policy on 1 January, with the ending of the Brexit transition period. However, after Biden last week said that his immediate focus would be to secure investments in the US before focusing on striking any trade deals had dealt a blow to the hopes of the UK of a quick trade agreement with the US.

According to the reviewed approach of the UK after Brexit, it is estimated that London will renew retaliatory tariffs on US steel which were imposed after current US president Donald Trump had said that the country’s national security was being threatened by steel imports.\

“Ultimately, we want to de-escalate the conflict and come to a negotiated settlement so we can deepen our trading relationship with the US and draw a line under all this. We are protecting our steel industry against illegal and unfair tariffs and will continue to do so, but are also showing the US we are serious about ending a dispute that benefits neither country,” said Liz Truss, the UK’s international trade secretary.

If a trade deal with the US was not reached, the aerospace tariffs could still be imposed on eth US, the UK said.

(Adapted from TheGuardian.com)

Categories: Economy & Finance, Geopolitics, Regulations & Legal, Strategy, Sustainability

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