WTO OKs $4B In EU Tariffs In Boeing Subsidies Dispute

Boeing said there was no basis for the EU to impose the tariffs because the planemaker had already complied with WTO findings making any penalties impermissible

The World Trade Organization ruled the European Union can charge levies worth $4 billion on imports from the U.S.

Both the U.S. and the European Union have signalled interest in settling the dispute over subsidies each provided to their respective planemakers, Boeing and Airbus, while accusing the other of refusing to talk seriously.

The retaliatory tariffs stem from a complaint filed 16 years ago and follows a parallel case the us filed against the EU over tariffs to Airbus subsidies that resulted in permission to the U.S.to impose as much as $7.5 billion in tariffs on European planes, wine, cheese and other products.

U.S. Trade Representative Robert Lighthizer said the tax breaks cited by the WTO are no longer in effect, making a decision based on them null and void.

The EU says the same is true of USA tariffs imposed against subsidies to the A380 superjumbo, which is being taken out of production.

The European Commission has prepared a list of U.S. products to be hit with the additional duties, including aircraft components, tractors, sweet potatoes, peanuts, frozen orange juice, tobacco, ketchup and Pacific salmon, according to a list of targets seen by AFP.

"Airbus did not start this WTO dispute, and we do not wish to continue the harm to the customers and suppliers of the aviation industry and to all other sectors impacted", said Airbus CEO Guillaume Faury in a written statement on Tuesday.

Bernd Lange, chairman of the European Parliament's trade committee, said the EU should enact the tariffs now, though he urged both sides to enter talks.

In March, in order to bring Boeing into compliance with WTO rules, Washington state eliminated its main tax incentive for the company.

The $4bn tariff window means European airlines that import Boeing jets could have to pay tariffs expected to match United States border taxes on Europe-built Airbus jets, now 15 percent.

Settlement of this long-running dispute over airplane manufacturing subsidies is mired in legal, bureaucratic and political complications.

Consuming thousands of pages of testimony and an estimated $100 million in costs since 2004, the aircraft spat has tested the resolve of the WTO, which is busy selecting a new leader.

If Democratic presidential challenger Joe Biden were to win the election next month, that would nearly certainly improve U.S. -EU relations and could potentially hasten a settlement. "President Trump looks at protecting the domestic interests but after this, there will be no re-election for him, so he might bring trade negotiations to the table", Bhanumurthy says.

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