US and EU reach agreement on large civilian jets and China; tariffs suspended for five years

By on July 3, 2021 0


On June 15, 2021, the White House ad that the United States and the European Union (EU) have reached an agreement in the Boeing-Airbus dispute at the WTO that has lasted 16 years and have agreed to address common challenges facing China. The US and EU will suspend WTO-authorized tariffs related to this dispute for five years and will work together to challenge and counter China’s non-market practices in this sector in a specific manner that reflects the standards of a fair competition. This includes collaboration on inbound and outbound investment and technology transfer.

A White House Fact Sheet and one USTR press briefing said the two sides agreed to the following general principles to guide their future cooperation.

White House Fact Sheet:

Suspend the tariffs linked to this dispute for five years. It signals a mutual determination to make a fresh start in the relationship. The deal also leaves the United States free to reapply tariffs if it feels they are no longer competing on an equal footing. [These tariffs will remain suspended so long as EU support for Airbus is consistent with the terms of this agreement. Should EU support cross a red line and U.S. producers are not able to compete fairly and on a level playing field, the United States retains the flexibility to reactivate the tariffs that are being suspended.]

Set up a working group to analyze and overcome any disagreement that may arise between the parties. The working group will collaborate and continue to discuss and develop these principles and appropriate actions. The trade ministers leading the working group will consult at least once a year. The working group will meet on request or at least every 6 months.

Ensure that American workers and industries can compete on a level playing field. The US and the EU have agreed to clear statements on acceptable support for major civil aircraft manufacturers that affirm the results of the disputes and the parties’ intention to ensure that American workers and industries can compete on one foot. equality.

Confront the threat the US and EU face from China’s ambitions to build a sector on non-market practices, including:

  • Significant cooperation to counter (1) investments in the EU and the United States by non-market actors, which can lead to the appropriation of the technology; and (2) overseas investments in China which are influenced by non-market forces.
  • Identify where joint work is needed to take parallel action against non-market practices.
  • Share information on these and other areas to forge a common approach in the large civil aircraft industry.

EU press release:

On June 15, 2021, the European Commission ad that European Commission Executive Vice-President Valdis Dombrovskis and U.S. Trade Representative Katherine Tai have reached an agreement on large civilian aircraft, turning nearly 17 years of disputes into a forward-looking collaborative platform for deal with bilateral issues as well as global challenges.

The two sides will now seek to overcome long-standing differences in order to avoid future disputes and to keep a level playing field between our aircraft manufacturers and will also endeavor to prevent further differences from arising.

The EU and the United States have also agreed to suspend the application of injurious tariffs worth US $ 11.5 billion for a period of five years, which harm businesses and people on both sides of the world. ‘Atlantic.

The two parties will work together to jointly analyze and address third party non-market practices that may adversely affect our large civil aircraft sectors.

Under the Agreement on a cooperative framework for large civil aircraft, both parties expressed their intention to:

  • establish a working group on large civil aircraft headed by the minister responsible for trade of each party,
  • provide financing to manufacturers of large civil aircraft at market conditions,
  • provide R&D funding through an open and transparent process and make the results of fully government funded R&D widely available, to the extent permitted by law,
  • not to 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, thus avoiding billions of euros in customs duties for importers on both sides of the Atlantic



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