The aircraft manufacturer Airbus made a proposal on Friday July 24 to resolve a very old dispute with its rival Boeing; which, according to the European Union (EU), should lead the United States to ” at once “ commercial reprisals decided on the basis of this conflict.
The European aircraft manufacturer and its American competitor, Boeing, and therefore Brussels and Washington, have been competing since October 2004 before the World Trade Organization (WTO). In question: the public aid paid to the two groups, deemed illegal on both sides. It is the longest and most complicated trade dispute dealt with by the WTO.
On Friday, Airbus announced that it would “In full compliance” with WTO rules. Concretely, the European aircraft manufacturer has reached an agreement with the Spanish and French governments to pay higher interest on the repayable advances granted by Paris and Madrid when the A350 long-haul aircraft program was launched. This system of reimbursable advances makes it possible to limit the financial risks taken by an industrialist when launching large-scale projects.
Interest rates now “Correspond to what the WTO considers to be the appropriate interest rates and risk assessment criteria”, explains Airbus. “After sixteen years of litigation, this is the last step in putting an end to this long-standing dispute and removing any justification for US tariffs. “
For his part, European Trade Commissioner Phil Hogan called on the United States to lift ” at once “ customs duties on European products, after Airbus announcements. These are not “Acceptable”, said Hogan, warning that, “In the absence of a regulation, the European Union will be ready to make full use of its own sanction rights”.
“If the United States continues to refuse an amicable negotiation, the European Union will have no choice but to adopt tariff sanctions against American products (…). We are determined to uphold our rights ”, added the French Minister of the Economy, Bruno Le Maire.
Compliance
In a press release, the executive chairman of Airbus, Guillaume Faury, ensures that the aircraft manufacturer has “Fully met all WTO requirements. These additional amendments to the RLI [avances remboursables] of the A350 show that Airbus did not neglect any detail to find a solution ”. It is, according to him, “A clear signal of support to those suffering from the violent impact of the tariffs imposed by the USTR”, the United States Trade Representative, “Especially at a time when industries are severely affected by the consequences of the Covid-19 crisis”.
The aircraft manufacturer “Wanted to wait no longer” and wanted to show that he was “Serious” in its desire to comply, explained a source familiar with the matter. There was no legal obligation to do so, she added, saying she hoped that “The United States realizes that this is a real gesture”.
The United States was authorized in October by the WTO to impose taxes on nearly 7.5 billion dollars (6.8 billion euros) of European goods and services imported each year. This is the heaviest sanction ever imposed by the WTO. Washington has since imposed punitive tariffs on certain products imported from the EU (including wine, cheese and olives) up to 25%.
Customs taxes of 10% on Airbus planes were raised to 15% in March. They also affect the American airlines which equip themselves with the European aircraft manufacturer, notes Airbus.
In a mirror procedure, the EU is waiting for the WTO to authorize it to impose also customs duties in reaction to undue subsidies paid this time by Washington to the American aircraft manufacturer Boeing. The decision should come in September or October, according to a source familiar with the matter. During this war in which the various players surrendered blow for blow, both Airbus and Boeing have in the past already proclaimed that they were in compliance.
