17-year Boeing-Airbus trade dispute between U.S. and EU Resolved after eyeing threat from China

U.S. and EU resolve 17-year Boeing-Airbus trade dispute issue

The United States and the European Union said on Tuesday they had resolved a 17-year war against airline funding, agreeing a five-year suspension from the Boeing-Airbus dispute.

"The summit began with a flight," said European Commission President Ursula von der Leyen, who met with President Joe Biden at the U.S.-EU summit in Brussels. "This opens a new chapter in our relationship because we are leaving the courts working with airlines - after 17 years of controversy."

At the next press conference, von der Leyen added: The agreement we have reached now opens a new chapter in our relationship, because it is moving from the court to the partnership. ”

U.S. Commercial Attorney Katherine Tai said during a video recording on Tuesday that: "Today's announcement resolves a long-standing trade outrage on U.S.-European relations."

"Instead of fighting one of our closest friends, we will eventually come together to fight the same threat," he added, referring to China.

He added in a joint statement with the EU that both sides "now have time and space to find a lasting solution for our new Working on Aircraft team, while saving billions of euros in transit operations in both Atlantic countries."

CNBC reported last week that the EU was pressuring the White House to reach an agreement to abolish the trade tax imposed during the Trump administration, in the wake of the 2004 Airbus and Boing dispute.

As part of the agreement, the EU and the U.S. They have agreed to provide research and development funding through an open and transparent process and not to provide certain support, such as paying taxes, to their producers who may harm the other side.

The idea is also to work together to address non-market processes carried out by other countries, including China, which builds its own public aircraft.

Tai said prices for EU products would be suspended as long as Airbus' government support met the terms of the agreement.
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"If EU supporters cross the red line and American producers are not able to compete equally and at the same level, the United States will continue to stagnate tariffs," he said.
Airbus Agreement with Boeing

🇪🇺🇺🇸 Dear @POTUS Joe Biden, what an honour and pleasure to welcome you in Brussels.

This first visit overseas shows your attachment to Europe.

We are friends, we are allies. And we're looking forward to working together. pic.twitter.com/MtcyW8hcog

— Ursula von der Leyen (@vonderleyen) June 15, 2021

Tuesday's big announcement marked Biden's first trip to EU headquarters and the first EU-U.S. meeting since 2014.

Airbus and Boeing, which are in charge of the commercial aviation market, welcomed the agreement, which comes just as manufacturers are starting to get back on track from the Covid-19 epidemic.

"Anything that makes gaming standards thrive in this highly competitive industry and avoids this lost proposal to lose Atlantic tax rates or any limits to this ideal," Airbus chief marketing officer Christian Scherer said in a press conference on Tuesday. "You don't need to take that to Airbus ... Just ask our customers."

Clients of European-made Airbus airlines include Delta Air Lines, but Airbus has increased its production in the U.S. With its Mobile factory, Ala., Where it makes lightweight aircraft.

"The understanding achieved today commits the EU to the assistance of launching the program, and leaves the necessary legislation to ensure that the EU and the United States meet those obligations, without the need for further WTO action," Boeing said in a statement. "Boeing will fully support the U.S. Government's efforts to ensure that the principles of this understanding are respected."

Boeing has considered launching a new jetliner, an effort that has been hampered by two of its 737 Max car sales in 2018 and 2019. , competing with Boeing cargo airlines.

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“This reflects the new spirit of cooperation between the EU and the U.S. And that we can solve other problems for the benefit of both of us. Together we can bring our citizens and businesses together, ”Valdis Dombrovskis, EU head of trade, said in a statement on Tuesday.
WTO decisions

EU-U.S. Relations were strained during the last White House term when then President Donald Trump accused the EU of being worse than China in its trade practices.

Trump has set $ 7.5 billion worth of jobs in European products after the World Trade Organization ruled that the EU provided undue funding to Airbus.

Shortly afterwards the EU imposed a $ 4 billion tax on U.S. products following another WTO decision that the US provide illegal assistance to Boing.

Boeing shares rose 0.3% in the morning trading, while Airbus shares listed in Paris were trading at 0.4%.

In contrast, the United Kingdom also said on Tuesday it hoped to work with the United States in the next few days.

The U.K. was a member of the EU at the time of the controversy and was hit by trade disputes that began during President Trump's tenure.

The EU and the U.S. in March approved a four-month moratorium on taxes, a move to resolve a long-running trade war.
Taxes on steel and aluminum

The European Union also wanted to reach an iron ore agreement during Biden's visit, but von der Leyen explained that the most important were airline subsidies.

President Trump has decided in 2018 to impose a 25% tariff on European steel and 10% on European aluminum for national security reasons - something the EU has strongly opposed and retaliated against. In response, the first round of 2.8 billion euros ($ 3.4 billion) was launched by the EU and another round of 3.6 billion euros was supposed to start this month.

However, the EU decided to suspend these steel-related activities last month as a sign of goodwill to boost negotiations.

Speaking on Tuesday, von der Leyen said he "hoped we would find a solution" on the issue.