A truce has been arrived at between the United States and the European Union in relation to their 17 year old trade dispute involving government subsidies offered to Boeing and Airbus. The two major trading partners have agreed to remove taxes for a period of five years that were imposed on goods of each other, worth $11.5bn, that includes import duties on wine, cheese and tractors.
In March this year, both the sides has d already suspended those tariffs in an effort to resolve the trade issues after both sides imposed the tariffs as punishment in the escalating dispute.
Tariffs on imports for the United Kingdom arising from the dispute were suspended by the US in March.
US President Joe Biden was seen trying to garner support for his more assertive stance towards Russia and China in a summit with EU leaders on Tuesday even as he also tries to move away from the trade disputes that had originated in the Trump-era.
“I think we have great opportunities to work closely with the EU as well as Nato and we feel quite good about it,” President Biden said.
Welcoming the truce, Airbus said that the agreement “will provide the basis to create a level-playing field which we have advocated for since the start of this dispute”.
“It will also avoid lose-lose tariffs that are only adding to the many challenges that our industry faces,” the European plane maker added.
For years, the US and the EU had been accusing each other of unfairly bolstering their flagship plane makers and the dispute had escalated over the years.
In a ruling in 2019, the World Trade Organization concluded that the support provided by the EU to Airbus was illegal which cleared the way for the US to impose tariffs worth up to $7.5bn in annual trade on EU products as determined by the WTO. About a year later, the WTO also ruled that the US has illegally provided support and benefits to Airbus rival Boeing and violated trade rules and awarded the right to the EI to impose tariff fines on the US worth about $4bn.
The assistance to the plane makers found at fault by the WTO has since been removed by both sides.
Since President Biden took over from predecessor Donald Trump, who imposed tariffs on the EU, both the US and the EU have adopted a much more conciliatory stance in the 17-year trade dispute.
“This meeting has started with a breakthrough on aircraft,” European Commission chief Ursula von der Leyen said. “This really opens a new chapter in our relationship because we move from litigation to cooperation on aircraft – after 17 years of dispute… Today we have delivered.”
President Biden had a meeting with EC President von der Leyen and the EU’s chairman Charles Michel, who represents EU governments.
“We’re facing a once in a century global health crisis,” President Biden said on Monday, while adding: “Russia and China are both seeking to drive a wedge in our transatlantic solidarity.”
(Adapted from BBC.com)