PARIS (Reuters) – Airbus from Europe said on Friday it would increase loan repayments to France and Spain in a “final” offer to reverse US tariffs and have the United States settle a 16-year dispute over billions of dollars in aircraft subsidies. .
The European Union, France and Spain said the measure to increase the interest rates paid by Airbus on loans for the development of A350 aircraft should resolve the dispute in the World Trade Organization and urged Washington to withdraw the tariffs on the goods of the European Union.
“In the absence of an agreement, the EU will be ready to take full advantage of its own sanction rights,” said EU Trade Commissioner Phil Hogan.
The loans are part of a United States-led system in the world’s largest corporate trade dispute, which has also issued a condemnation of the United States’ support for Boeing.
Last year, the United States obtained authorization from the WTO to impose tariffs on up to $ 7.5 billion of EU goods, from wine to whiskey.
Trade groups prepare for a row escalation in the fall, when the EU is expected to gain WTO approval to counter-attack with its own subsidy tariffs for Boeing.
The WTO has criticized both Europe and the United States for distributing illegal support to their respective aircraft manufacturers. But for the past eight years, the argument has been primarily about whether each party obeyed those rulings amid multiple appeals.
“With this final move, Airbus is considered in full compliance with all WTO decisions,” said Airbus.
In May, the United States declared itself in full compliance with the WTO findings after Washington state abolished aerospace industry tax exemptions that greatly benefited Boeing.
INDUSTRIAL PRESSURE
Although Airbus is not officially a party to the case, which pits the United States against the EU, as well as Britain, France, Germany and Spain, Friday’s statement opens the door to negotiations to resolve the dispute, a European source said. .
Both sides have repeatedly urged negotiations while accusing the other of failing to respond seriously to the invitation.
Boeing had no immediate comment. The United States Trade Representative did not immediately respond to a request for comment.
“This is an interesting development, but details are lacking and there is no reference to remedying the illegal subsidies for the A380,” said a US source.
Airbus says funding for the A380 is no longer relevant after it decided to phase out the world’s largest aircraft due to weak sales.
The latest move comes amid mounting pressure on Airbus and European governments from industries affected by US tariffs.
They are angry at being penalized for illegally supporting aircraft manufacturers just as their own industries are recovering from the coronavirus epidemic. The Scotch Whiskey Association called for a deal before the tariffs caused “irreparable damage.”
The consequences are not limited to Europe.
Airbus said that American airlines were affected by the fares of European planes. The United States Council of Distilled Spirits said beverage companies on both sides of the Atlantic “have suffered enough already.”
European officials are trying to override the United States’ tariffs for legal reasons, but say they have been thwarted by a procedural dispute after Washington blocked appointments to the WTO appeals body. The President of the United States, Donald Trump, has been critical of the WTO.
At the same time, the EU’s retaliatory sanctions schedule has been shortened by several months, to September or October.
“We are at a standstill and we need to get out of it. It is a way of showing good faith and opening the door to find a solution, ”said a source from the European industry, referring to the renewed loans.
Reports by Tim Hepher, Leigh Thomas, Gabriela Baczynska, Kate Abnett, David Shepardson, Into Landauro, Caroline Copley, Catherine Evans and Susan Fenton Edition
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