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Boeing-Airbus trade row set to end after 17 years | Boeing-Airbus trade row set to end after 17 years |
(about 1 hour later) | |
EC President Ursula von der Leyen and US President Joe Biden had a summit in Brussels | EC President Ursula von der Leyen and US President Joe Biden had a summit in Brussels |
The US and the EU have agreed a truce in a 17-year trade dispute over subsidies for Boeing and Airbus. | The US and the EU have agreed a truce in a 17-year trade dispute over subsidies for Boeing and Airbus. |
Under the agreement, both sides will remove taxes on $11.5bn (£8.2bn) of goods, including wine, cheese and tractors, for five years. | Under the agreement, both sides will remove taxes on $11.5bn (£8.2bn) of goods, including wine, cheese and tractors, for five years. |
Those tariffs, imposed by both sides as punishment in the escalating dispute, had already been suspended in March while they tried to resolve matters. | Those tariffs, imposed by both sides as punishment in the escalating dispute, had already been suspended in March while they tried to resolve matters. |
In March the US suspended tariffs on UK imports arising from the dispute. | In March the US suspended tariffs on UK imports arising from the dispute. |
US President Joe Biden had a summit with European Union (EU) leaders on Tuesday, where he is trying to bolster support for his more assertive stance towards Russia and China, and move away from Trump-era trade rows. | |
"I think we have great opportunities to work closely with the EU as well as Nato and we feel quite good about it," President Biden said. | "I think we have great opportunities to work closely with the EU as well as Nato and we feel quite good about it," President Biden said. |
Airbus said it welcomed the truce, adding that the agreement "will provide the basis to create a level-playing field which we have advocated for since the start of this dispute". | Airbus said it welcomed the truce, adding that the agreement "will provide the basis to create a level-playing field which we have advocated for since the start of this dispute". |
"It will also avoid lose-lose tariffs that are only adding to the many challenges that our industry faces," the planemaker added. | "It will also avoid lose-lose tariffs that are only adding to the many challenges that our industry faces," the planemaker added. |
Boeing-Airbus fight | Boeing-Airbus fight |
The dispute between the US and EU has escalated over many years, with both sides accusing the other of unfairly propping up their flagship planemakers. | The dispute between the US and EU has escalated over many years, with both sides accusing the other of unfairly propping up their flagship planemakers. |
In 2019, the World Trade Organization ruled that the EU had illegally provided support to Airbus, clearing the way for the US to respond with tariffs worth up to $7.5bn (£5.4bn) in annual trade. | In 2019, the World Trade Organization ruled that the EU had illegally provided support to Airbus, clearing the way for the US to respond with tariffs worth up to $7.5bn (£5.4bn) in annual trade. |
Roughly one year later, in a parallel case, it ruled that the US benefits to Boeing also violated trade rules, authorising the EU to hit the US with tariffs worth roughly $4bn. | Roughly one year later, in a parallel case, it ruled that the US benefits to Boeing also violated trade rules, authorising the EU to hit the US with tariffs worth roughly $4bn. |
Since then, both sides have taken steps to remove the assistance found at fault. | Since then, both sides have taken steps to remove the assistance found at fault. |
The US and the EU have taken a much more conciliatory stance in the 17-year dispute since President Biden took over from predecessor Donald Trump, who imposed tariffs on the EU. | The US and the EU have taken a much more conciliatory stance in the 17-year dispute since President Biden took over from predecessor Donald Trump, who imposed tariffs on the EU. |
Italian parmesan had been affected by tariffs | Italian parmesan had been affected by tariffs |
"This meeting has started with a breakthrough on aircraft," European Commission chief Ursula von der Leyen said. "This really opens a new chapter in our relationship because we move from litigation to cooperation on aircraft - after 17 years of dispute... Today we have delivered." | "This meeting has started with a breakthrough on aircraft," European Commission chief Ursula von der Leyen said. "This really opens a new chapter in our relationship because we move from litigation to cooperation on aircraft - after 17 years of dispute... Today we have delivered." |
President Biden had a meeting with EC President von der Leyen and the EU's chairman Charles Michel, who represents EU governments. | President Biden had a meeting with EC President von der Leyen and the EU's chairman Charles Michel, who represents EU governments. |
"We're facing a once in a century global health crisis," President Biden said on Monday, while adding: "Russia and China are both seeking to drive a wedge in our transatlantic solidarity." | "We're facing a once in a century global health crisis," President Biden said on Monday, while adding: "Russia and China are both seeking to drive a wedge in our transatlantic solidarity." |
The US imposed tariffs on whisky | The US imposed tariffs on whisky |
US Trade Representative Katherine Tai discussed the aircraft dispute in her first face-to-face meeting with EU counterpart Valdis Dombrovskis on Monday ahead of Tuesday's US-EU summit. | US Trade Representative Katherine Tai discussed the aircraft dispute in her first face-to-face meeting with EU counterpart Valdis Dombrovskis on Monday ahead of Tuesday's US-EU summit. |
Freezing the trade conflicts would give both sides more time to focus on broader agendas such as concerns over China's state-driven economic model, diplomats said. | Freezing the trade conflicts would give both sides more time to focus on broader agendas such as concerns over China's state-driven economic model, diplomats said. |
"We are strongest when we work with our friends and allies", Ms Tai said. | |
"Our goal was clear - to forge a new, co-operative relationship in this sector so that our companies and our workers can compete on a more level playing field." | |
The EU and the US are the world's top trading powers, along with China, but Donald Trump sought to sideline the EU. | The EU and the US are the world's top trading powers, along with China, but Donald Trump sought to sideline the EU. |
After scotching a free-trade agreement with the EU, the Trump administration focused on shrinking a growing US deficit in goods trade. | After scotching a free-trade agreement with the EU, the Trump administration focused on shrinking a growing US deficit in goods trade. |
President Biden, however, sees the EU as an ally in promoting free trade, as well as in fighting climate change and ending the Covid-19 pandemic. | President Biden, however, sees the EU as an ally in promoting free trade, as well as in fighting climate change and ending the Covid-19 pandemic. |
In December, the UK said it would voluntarily suspend its tariffs on US goods imposed as parts of the Boeing dispute. The US responded in kind in March. | In December, the UK said it would voluntarily suspend its tariffs on US goods imposed as parts of the Boeing dispute. The US responded in kind in March. |
UK officials said they hoped for compromise talks, casting the measure as an example of the benefits to the UK's ability to act as an independent trading nation following Brexit. | UK officials said they hoped for compromise talks, casting the measure as an example of the benefits to the UK's ability to act as an independent trading nation following Brexit. |
The world has changed a great deal since 2004 - and this deal acknowledges that fact. Where once Airbus and Boeing had the large aircraft market to themselves, they now face a stern challenge from China. | The world has changed a great deal since 2004 - and this deal acknowledges that fact. Where once Airbus and Boeing had the large aircraft market to themselves, they now face a stern challenge from China. |
Chinese manufacturer Comac is already in the final stages of developing the C919 - a plane designed as a direct rival to Airbus' A320 neo and the Boeing 737 Max. | Chinese manufacturer Comac is already in the final stages of developing the C919 - a plane designed as a direct rival to Airbus' A320 neo and the Boeing 737 Max. |
Longer term, it has a partnership with Russia's United Aircraft Corporation, to develop a larger, wide-body jet. | Longer term, it has a partnership with Russia's United Aircraft Corporation, to develop a larger, wide-body jet. |
Airbus's chief executive Guillaume Faury has already suggested that the duopoly in the aircraft market could become a 'triopoly' by the end of the decade. | Airbus's chief executive Guillaume Faury has already suggested that the duopoly in the aircraft market could become a 'triopoly' by the end of the decade. |
So it makes little sense for either side to waste energy fighting yesterday's battles when they now face a common rival. | So it makes little sense for either side to waste energy fighting yesterday's battles when they now face a common rival. |
It's a microcosm of wider EU-US relations: faced with China's growing economic power and ever-frostier relations with Russia, there seems to be a realisation that old alliances need to be rekindled. | It's a microcosm of wider EU-US relations: faced with China's growing economic power and ever-frostier relations with Russia, there seems to be a realisation that old alliances need to be rekindled. |