Wednesday, March 3, 2021

Airbus-Boeing: a sterile conflict

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Editorial of the “World”. It is the longest and most inextricable conflict in the history of the World Trade Organization (WTO). For sixteen years, the two main aircraft manufacturers, the European Airbus and the American Boeing, have accused each other of having received undue state aid with regard to the rules of international trade. This dispute, without winner or loser, where each side bears its share of responsibility, continues to poison relations between the United States and the European Union (EU). The global crisis would be a good opportunity to put an end to it.

According to the WTO condemnation pronounced in October 2019 against Airbus, Washington is entitled to impose taxes on a volume of products imported from the EU representing a total of 7.5 billion dollars (6.4 billion dollars). euros). At this stage, the American sanctions relate to only half of this figure, but already heavily penalize sectors which consider themselves unfairly targeted. French wines are thus subject to a 25% tax, weakening the sector on its main export market. German and Spanish wines, as well as British whiskeys, are also targeted.

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The United States threatened to apply at any time, from July 26, all the sanctions authorized by the WTO. French handbags, Spanish olive oil and Italian cheeses could be added to the list of surcharged products. Even if Washington is within its rights, this escalation would be a mistake.

First, Airbus made amends by complying with WTO requirements. The European manufacturer agrees to pay higher interest rates than expected to repay loans granted by France and Spain as part of the development of the A350.

Blow for blow

Then, the Europeans are in the process of activating the same type of sanctions against the United States, Boeing itself being accused of having benefited from illegal aid from the American government. Even if the decision was delayed due to the Covid-19 pandemic, the WTO could, as early as October, authorize the EU to in turn tax 11 billion US exports. This customs battle, in which each of the protagonists returns blow for blow, leads to a zero-sum game, which undermines trade between two trading partners already considerably weakened by the consequences of the pandemic.

The crisis should make them realize that it is essential to put an end to this sterile war, when the aeronautics sector enters a zone of turbulence. The sudden fall in business and tourist travel is lastingly weakening the airlines, the main customers of Airbus and Boeing.

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Both must focus on their industrial future, rather than on an endless argument, which should be a thing of the past. Especially since, for Boeing, the current crisis is compounded by the reliability problems of its star aircraft, the 737 MAX. For months, the fleet of these devices has been temporarily banned from flying, after two fatal accidents, in October 2018 and March 2019.

Finally, the last argument for reconciliation, the Airbus-Boeing duopoly will not be eternal. The two groups will soon have to reckon with the Chinese Comac, which is ready to play the referees in this market.

If the EU, Airbus and even Boeing are now convinced that the page must be turned, it remains to convince Donald Trump that getting bogged down in this conflict is in no one’s interest.

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