Everything indicates that, as of Friday 18 October, the United States will apply the counter-measures under the outcome of the World Trade Organisation (WTO) arbitration in the dispute on support for the aircraft manufacturer Airbus. But the difficulties encountered by the WTO (see other news) may limit the options available to the European Union...
The compliance process
It should be recalled that compliance was the only way Washington proposed to cancel its sanctions (see EUROPE 12348/7).
But on this point, the tone has always been the same among the European institutions: the end of European support for the aircraft manufacturer must be accompanied by disciplines on the subsidies that apply to its global competitors, including Chinese.
The Commission pointed out that it had still not encountered any interest in working on such disciplines across the Atlantic.
Penalty reduction
The EU has already expressed its dissatisfaction at the WTO: the level of the amount determined by the WTO arbitrator in this dispute is disproportionate to the current level of its support. The pegged aids would, to date, be reduced to nothing, several sources pointed out.
Most of the loans granted to the aircraft manufacturer's A350 and A380 programs remain.
A second compliance review is expected to be completed shortly and a confidential interim report is already expected. The EU hopes that with the termination of the A380 programme, it will therefore be more favourable to European interests. As for the A350, its support could soon be brought into line with WTO rules, according to one source.
The final interim report is expected to be published in December 2019, but the WTO arbitrator will then have to rule.
This is where the question of timing arises: with the imminent risk of paralysis of the Appellate Body (WTOAB) of the dispute settlement mechanism, as of 11 December, will the institution still be able to rule on this report?
The escalation
Europeans are also reportedly considering responses to US countermeasures that are consistent with their WTO commitments (see EUROPE 12340/13).
They could, for example, exercise their rights arising from arbitrations in favour of the WTO.
Thus, in March 2019, a WTOAB report confirmed that tax benefits (FSC/ETI) used by Boeing between 1989 and 2006 were incompatible and caused serious damage to European interests. Rather than wait for arbitration on the aircraft manufacturer Boeing in spring 2020, the EU could choose to impose these countermeasures already.
However, in the European Parliament, this solution is not popular.
Bernd Lange (S&D, Germany), Chairman of the Committee on International Trade (INTA), called on 15 October to avoid any tariff escalation that would harm the multilateral trading system.
Mr Lange acknowledged that the EU may therefore be trapped by these sanctions.
However, these countermeasures may allow it to escape sanctions on cars for some time to come, he added. According to him, it is to be hoped that by 13 November, President Donald Trump will not endorse Commerce's report under Section 232 of the Trade Expansion Act.
A solution that could help more than one party on both sides of the Atlantic (see EUROPE 12341/20). (Original version in French by Hermine Donceel)