The United States and the European Union agreed to extend a five-year tariff truce, leaving behind the long-running dispute over subsidies to aviation giants Airbus and Boeing. This was announced by the president of the European Commission after her meeting with US President Joe Biden, who is on a tour of Europe trying to rebuild ties with his allies.
Ending over 17 years of business disputes. This Tuesday, June 15, the European Union and the United States agreed to a truce for the historic tariff conflict between the US multinational Boeing and the European Airbus. A change in the policy of the White House that implies the suspension, for five years, of the crossed tariffs that both parties have been imposing as a result of the dispute.
“We have had an excellent meeting between friends and allies and this meeting has started with a breakthrough on aircraft. The agreement that we have now found really opens a new chapter in our relationship, because we moved from litigation to cooperation on aircraft. , and that after almost 20 years of dispute, “said the president of the European Commission, Ursula Von der Leyen, adding that it is the longest commercial litigation in the history of the World Trade Organization (WTO).
Von der Leyen’s statement comes after his bilateral meeting with the president of the United States, Joe Biden, which was also attended by the president of the European Council Charles Michel, where they seem to have left years of trade conflicts behind – valued at 11,500 million dollars in sanctions – and thus soften the relations between both partners.
The meeting started with a breakthrough on the aircraft dispute.
Today we move from litigation to cooperation.
We are ending the longest trade dispute in the history of the WTO.
We are delivering. pic.twitter.com/h3kKqQSHgv
– Ursula von der Leyen (@vonderleyen) June 15, 2021
The five-year truce, negotiated during marathon days of talks between European and American officials, was formalized with Biden’s visit to the old continent. Biden welcomed the “breakthrough” upon his arrival in Geneva, noting that “America is flying, maybe we never left.”
In an official statement, the Democratic president said that “both the United States and the European Union agreed to suspend our tariffs for five years and we are committed to guaranteeing a level playing field for our companies and our workers.” The president also noted that they will work together in specific ways on investments and technology transfer.
Europe, an ally of the United States against China
From the negotiation comes the union against the common “enemy”: unfair competition from China and the model proposed by the People’s Republic of China, which is of particular concern to the United States. “We are back and that is why we are here,” Biden said, stressing that Europeans are “natural” allies of their country because of the values they share. “Instead of fighting with one of our closest allies, we are finally uniting against a common threat,” said US Trade Representative Katherine Tai, referring to the Asian giant.
According to Tai, it is a “fight” model that they will use in the face of other challenges posed by China and “counter China’s non-trade practices in this sector that give Chinese companies an unfair advantage,” the Biden statement added. For Washington, this pact represents a “strengthening” of democracies everywhere, based on “values such as fair competition and transparency.”
After weeks of intense diplomacy, we have reached a deal on a set of high-level principles that resets US-EU engagement in the large civil aircraft industry. How this affects US workers: 👇 pic.twitter.com/9IJpw1za0M
– Ambassador Katherine Tai (@AmbassadorTai) June 15, 2021
However, US officials warned that their country will respect the pact “as long as the EU’s support for Airbus is consistent with the terms of the agreement” and does not cross “red lines” and US manufacturers can compete fairly.
Decades of trade sanctions on both sides of the Atlantic
Due to the commercial dispute between the two aeronautical giants, Brussels and Washington have been imposing a series of punitive tariffs directed at European cheeses and wines; and other American products such as tobacco or alcoholic beverages, valued in millions of dollars.
The sanctions that respond to an “eye for an eye” due to mutual disagreements with state subsidies for the US aircraft manufacturer Boeing and its European rival Airbus, aggravated by the harsh tariffs on aluminum and steel inherited from the previous Government.
Therefore, at the beginning of his term – in January of this year – Biden lifted the tariffs imposed during the Donald Trump Administration, in what was expected as the prelude to the pact agreed on Tuesday and a break with Trump’s four years in Washington. “I have a very different vision than my predecessor,” Biden said.
International reactions to the truce
The reactions in this regard have not been long in coming. France-based Airbus chief commercial officer Christian Scherer said that “anything that levels the playing field in this highly competitive industry and avoids this terrible proposal of tariffs where everyone loses (is) good.”
Bonne nouvelle pour nos viticulteurs!
Avec l’accord décidé sur le litige Airbus – Boeing, les droits de douane américains, notamment sur le vin français, sont levés. Voilà the first results of notre nouvelle relation avec les États-Unis. Voilà la coopération efficace.
– Emmanuel Macron (@EmmanuelMacron) June 15, 2021
French President Emmanuel Macron welcomed the agreement. The French Finance and European Affairs Ministers also praised the agreement: “Now we are going to be able to focus on finally leaving these differences behind and defining the conditions for fair competition on a global scale to support the aerospace sector, which is strategic for both Europe. as for the United States, “they stressed in a joint statement.
From Spain, the Minister of Industry, Trade and Tourism, Reyes Maroto, pointed out that it is a “historic pact to put an end to the longest trade conflict within the WTO and to definitively eliminate the tariffs that have weighed down the Spanish aeronautical and agri-food industry. “.
While the US spirits industry said they appreciate the Biden Administration’s work to reestablish relationships “with our business allies” at a critical time for the US hospitality industry, Chris Swonger, president of the Distilled Spirits Council reiterated how much The European Union, like the United Kingdom, continues to impose a 25% tariff on US whiskeys as part of the steel and aluminum trade dispute.
More than 17 years of transatlantic trade war
The controversy of the aeronautical industry is one of the longest in the history of the World Trade Organization and began in 2004 with the lawsuit and complaints about the subsidies that both companies received that -in 2019- the WTO declared as illegal giving rise to a war of lawsuits and economic sanctions on European and American products.
Now the Europeans are trying to consolidate a friendlier stage and jointly tackle other problems. A European official said both sides had been “sweating” to find common ground before the meetings and offer a signal that the conflict was Trump is a thing of the past.
However, the shadow of the former Republican president hovers over the aluminum and steel tariffs, of 25% and 10% respectively, that he imposed on Europe in 2018. In this area, the transatlantic trade dispute still does not offer a solution in sight .
With Reuters, AFP and EFE