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Original title: The WTO supports the EU and may impose tariffs on the United States and Canada
Regarding the never-ending disputes between the United States and Europe over aviation manufacturing subsidies, the World Trade Organization (WTO) once again stood still: the EU’s appeal was approved and it may take countermeasures against almost US $ 4 billion in American goods and services each year. For the European Union, a year after the United States officially imposed tariffs on it, this WTO decision is of great significance. While the amount has been reduced compared to the original lawsuits, it also conveyed to the United States a never-wait-to-die attitude.
After two weeks of market news, the WTO finally issued a formal ruling. At the 13th local time, Geneva trade officials stated that due to the United States’ failure to comply with the WTO decision on the US government subsidy to Boeing, the EU may take countermeasures against goods and services Americans worth no more than $ 3.99 billion each year. During the period from September 2015 to September 2015, tax cuts and subsidies provided by the State of Washington to the Boeing Company in the United States caused the European Union to suffer similar losses, including three significant losses on sales of Airbus.
As the world’s two great aircraft manufacturing giants, Boeing and Airbus occupy an unshakable position in the industries of the United States and the European Union, respectively. The two-party asylum for Boeing and Airbus has also sparked endless disputes.
On October 6, 2004, the United States filed a lawsuit with the WTO, accusing the European Union of providing illegal subsidies to Airbus in various ways. The European Union also took the same measures and sued the WTO for granting illegal subsidies to the Boeing company. . After that, the accusations and rulings continued.
The latest round of lawsuits included the additional fees in the ruling. In October 2019, following a WTO ruling, the United States formally imposed additional tariffs on EU products worth US $ 7.5 billion exported to the United States. In February this year, it also increased tariffs on large EU civil aircraft from 10% to 15%.
In order not to be left behind, the EU asked the United States to immediately cancel its decision to impose tariffs on Airbus in July this year. At the time, the EU Trade Commissioner Phil Hogan stated that the WTO will soon issue a ruling on the EU’s prosecution for Boeing’s illegal subsidies. If the United States is unwilling to reach an agreement with the EU, the EU will reserve the right to impose sanctions against the United States.
Now the European Union has finally recovered. Although the US Trade Representative, Lighthizer, stated in a press release the same day that Washington state’s tax cut policy had been withdrawn earlier this year, the EU does not have an “effective basis” to take retaliation against American products. However, the WTO arbitrator emphasized that the United States has in fact provided Boeing with illegal subsidies through this tax cut policy, which is not conducive to Airbus commercial aircraft sales.
It is worth noting that the amount of almost US $ 4 billion is discounted compared to the EU requirements. The European Union previously required a cap of roughly US $ 8.58 billion per year for countermeasures, while the United States said it should not exceed US $ 411.8 million. According to the WTO ruling, the EU can now require the WTO dispute settlement mechanism to authorize it to take countermeasures against the United States, an amount subject to this ruling, which will enter into force once authorized.
However, the EU does not appear to intend to fight back immediately. EU Trade Commissioner Don Brovskis said on social media that he will re-engage with the United States: “What we look forward to most is a negotiated agreement. Otherwise, we will be forced to defend our interests and act appropriately. “. Answer”.
Of course, this may not be simple, Lighthizer has rejected all EU solutions, emphasizing the demands of the United States: first, the EU promises to end its subsidies to Airbus, and second, monetary compensation.
What makes the situation even worse is the impact of the epidemic. As a result, the aviation industry has suffered an unprecedented shock and the governments of all countries are increasing subsidies. Take Boeing for example: Data released on the 13th showed that the company delivered 28 commercial jets in the third quarter, but this fell 55% compared to 62 delivered in the same period in 2019.
At the same time, the EU continues to monitor the current situation. Three officials familiar with EU thinking said the EU could wait until the end of the US general election in three weeks. The EU is understood to have drawn up a list of tariffs on US goods. The aforementioned officials said that although the target is aimed at industries important to US President Trump and his Republican allies, including aircraft, coal, produce and seafood, the EU may not move until after the US elections on March 3. November to see if it’s correct. An agreement can be reached.
The EU plan is not unexpected. After all, Democratic presidential candidate Joe Biden has a much friendlier attitude toward the EU than Trump, who opened fire everywhere. His top foreign policy adviser, Anthony Brinken, once said: If Biden wins the November presidential election, he will end Trump’s “artificial trade war” against the European Union.
Sun Chenghao, a scholar at the Institute of American Studies at the China Institute of Modern International Relations, noted that from a conceptual standpoint, Trump has always advocated America first, and his approach is more radical; In contrast, Biden’s team has actually released a lot of information that is beneficial to Europe. For example, on issues like the Iranian nuclear deal and the World Health Organization, it is more in line with European perceptions. Not long ago, there were reports that the UK began contacting Biden’s team.
“If Biden is elected, at least there will be more room for dialogue between Europe and the United States and, of course, he will insist on his own demands. However, Biden’s team cannot use tariffs to pressure like Trump, but will adopt Negotiation and other gentler methods, “Sun Chenghao said.
Beijing Business Daily Reporter Tao Feng Tang Yitian
