A World Trade Organization (WTO) arbitration panel on Tuesday 13 October found that the European Union was in a position to apply retaliatory tariff measures to the tune of €3.4 billion (around US$4 billion) against the United States in the Airbus/Boeing dispute (DS 353).
Indeed, the arbitration panel concluded that “the EU may request authorisation from the Dispute Settlement Body to take countermeasures against the United States [...] at a level not exceeding, in total, $3,993,212,564 per year”.
The adoption of such measures will have to await validation of the arbitration panel’s report by the WTO Dispute Settlement Body on Monday 26 October. These measures will take the form of customs duties on imports into the EU of Boeing aircraft and other US consumer products, with the European list drawn up in April 2019 (see EUROPE 12238/1) serving as a model. They may apply immediately or on a deferred basis and until the United States complies by completely renouncing its illegal aid.
On the industry side, it is estimated that this $4 billion is high enough to cover all European imports of Boeing aircraft in 2019. The argument was also made that the EU has an additional $4 billion in sanction rights in a dispute over aid (‘foreign sales corporations’) from which the US aircraft manufacturer has benefited. This right has never been put into practice, however.
On Tuesday, Europeans reiterated their call for a negotiated solution to end a dispute that has lasted more than 15 years. “I have made it clear that my strong preference is for a negotiated settlement with the U.S, avoiding harmful rounds of measures and countermeasures”, said EU Commissioner for Trade Valdis Dombrovskis.
He has suggested that Washington has imposed €6.7 billion ($7.5 billion) in customs duties since October 2019 (see EUROPE 12352/16). “The EU will then refrain from exercising our retaliation rights, and we can wipe the slate clean, working together to find common ground across a range of areas”, he promised. Nevertheless, he warned that in the absence of a negotiated outcome, the EU “will reluctantly be forced” to defend its interests.
The Chairman of the European Parliament’s Committee on International Trade, Bernd Lange, also considered that finding a negotiated solution should be “an absolute priority”.
See the report of the arbitration panel: https://bit.ly/33TmM4G (Original version in French by Mathieu Bion)