Worldwide: US, EU suspend tariffs on large civil aircraft, target China in fight against non-trade practices
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The United States and the European Union (“EU”) ad a “cooperative framework“To address and eventually resolve their long-standing dispute over the large civil aircraft subsidies, also known as the Boeing–Airbus or disputes involving large civil aircraft. Originally initiated in 2004 when the United States filed a complaint with the World Trade Organization (“WTO”) against the EU alleging illegal subsidies to Airbus SE, the dispute over large civil aircraft is the most important dispute. formerly at the WTO. As part of the new deal, the US and the EU will suspend their respective WTO-authorized tariff countermeasures, which affected a total value of $ 11.5 billion in trade. The US and EU announcement is a major step towards a potential resolution of the 17-year transatlantic dispute over aircraft subsidies.
As previously reported, the initial duties took place in October 2019, when the United States imposed tariffs of 15% under Section 301 of the Trade Expansion Act of 1962 on imports of d ‘civil aircraft and aircraft parts (under HTSUS codes 8802.40.0013, 8802.40.0015, 8802.40 .0017, 8802.40.0019 and 8802.40.0021). A rate of 25 percent has been adopted by the United States for all other listed imports of European origin, covering agricultural products, spirits and luxury goods, among other products. The EU retaliated in November 2020 with tariffs on around $ 4 billion of US imports, with corresponding rates of 15% for civilian aircraft and aircraft parts and 25% for all other imports. of American origin, covering agricultural products and industrial and finished products.
As a member of Agreement on a cooperative framework for large civil aircraft, the US and the EU have expressed their intention to:
- Establish a Large Civil Aircraft Working Group led by the Minister responsible for Trade of each party, which will meet every 6 months or upon request,
- Provide financing to producers of large-capacity civil aircraft only at market conditions,
- Provide R&D funding through an open and transparent process and make widely available the results of fully government funded R&D, to the extent permitted by law,
- Do not provide R&D funding as well as specific support (such as specific tax breaks) to their own producers which would be detrimental to the other party,
- Collaborate to combat non-market practices of third parties that may harm their respective large civil aircraft industries,
- Continue to suspend the application of their countermeasures, for a period of 5 years, avoiding billions of euros in customs duties for importers on both sides of the Atlantic.
According to statements by United States Trade Representative (“USTR”) Katherine Tai, tariffs would remain suspended as long as the terms of the agreement were respected and as long as they worked to resolve the issues, including the subsidies. suspense already paid.
The US-EU cooperation framework also includes an “Annex on Cooperation on Non-Market Economies” to “address more effectively the challenge of non-market economies” in the civil aviation sector. These stages of cooperation include coordinating and exploring information sharing regarding cybersecurity and other concerns, screening inbound and outbound investment, and “joint analysis of non-market practices”, especially those of China. , in the sector of large civil aircraft. USTR Tai described the deal as “a model we can build on for other challenges” related to “the threat of China’s non-market practices.”
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