The WTO finalizes authorization for the EU to retaliate against the US for aid to Boeing

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The WTO finalizes authorization for the EU to retaliate against the US for aid to Boeing




The state of Washington repealed a law that reduced the tax rate for aeronautics located in its territory, such as Boeing, by 40%, but included the return of some USD 300 million that the WTO considers a disguised subsidy


© Jim WATSON
The state of Washington repealed a law that reduced the tax rate for aeronautics located in its territory, such as Boeing, by 40%, but included the return of some USD 300 million that the WTO considers a disguised subsidy


A year after sanctioning it for its aid to Airbus, the WTO is preparing to authorize the European Union on Tuesday to adopt retaliatory measures against Washington for its aid to Boeing, a new twist in a commercial bulletin that has already lasted 16 years .

The World Trade Organization (WTO) must authorize the European Union (EU) to apply tariff sanctions to about 4,000 million dollars in products imported from the United States, according to the Bloomberg agency.

Faced with this prospect, Europe has already drawn up a long list of products that could be taxed.

Among them, airliners made in the United States and tractors, but also tobacco, sweet potatoes, peanuts, frozen orange juice, ketchup or Pacific salmon, according to an updated list that the AFP had access.

The European aircraft manufacturer and its US competitor, and through them Brussels and Washington, have been facing each other since October 2004 in the WTO, world trade justice of the peace, over public aid granted to the two groups, which both parties consider illegal.

The decision expected on Tuesday in favor of the EU follows the authorization granted last year to the United States to impose tariffs on European goods and services imported each year worth 7.5 billion dollars, the highest sanction ever imposed by the WTO. .

Since then, Washington has imposed punitive tariffs of around 25% on EU imports such as wine, cheese and olive oil. It also raised tariffs on Airbus planes from 10% to 15%.

The EU and some of its member states appealed in December a WTO decision according to which they still did not comply with the organization’s regulation with aid to Airbus. Examination of this appeal is blocked due to Washington’s refusal to appoint the judges of the dispute settlement court, essential for its operation.

– US Presidential –

The European manufacturer later assured that it “fully” complies with WTO rules and announced this summer that it had agreed with the Spanish and French governments to pay the highest interest on the repayable loans granted by Paris and Madrid for the launch of the long-haul plane. A350. These refundable credits from States to Airbus programs is the cause of American complaints.

The United States assures that it is also complying with the WTO rules in the case that will cost it the sanction on Tuesday.

The State of Washington, which is home to numerous Boeing factories, repealed on April 1 a law that reduces the tax rate for aeronautical companies located in its territory (northwest) by 40% and includes a refund of about 300 million dollars that for the WTO it is a disguised subsidy that distorts the US manufacturer’s competition with Airbus.

As soon as the WTO makes its decision public, the EU will be able to impose punitive tariffs from 27 October. A few days before the US presidential election, few observers believe he will take that step immediately.

Several European and Commission officials have reiterated for months that the EU is ready to impose them if Washington does not withdraw its own.

In a sector damaged by the covid-19 epidemic, the WTO decision could even “open the door to negotiate,” says an industrial source.

The prospect of the return of the Boeing 737 MAX to the air could constitute an additional incentive to negotiate from the US side, in order not to increase the price of the device, which has been on the ground since March 2019 after two accidents that caused 346 deaths. Several European companies have placed hundreds of orders for this model.

mra / aue / bh / af / rsr / es / zm

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