EU hopeful of ending US aircraft dispute by July

"The work is advancing so I would say this timeline is realistic. Of course it requires effort from both sides," said European Commission vice president Valdis Dombrovskis. [European Union, 2021. Source: EC - Audiovisual Service]

The European Union and the United States are working to resolve a dispute over subsidies to aircraft makers and should be able to do so by July, the EU’s trade chief said on Thursday (20 May) in a further sign of improving transatlantic trade ties.

Both sides agreed in March to suspend tariffs on billions of dollars of imports in a 16-year-old dispute at the World Trade Organisation over subsidies for planemakers Airbus and Boeing. The suspension runs until July 10, with tariffs re-applying on July 11 if there is no solution.

“We had intensive and broad discussions on this topic with US Trade Representative Katherine Tai last week and so during today’s video conference she confirmed this timeline,” European Commission vice president Valdis Dombrovskis told a news conference.

“The work is advancing so I would say this timeline is realistic. Of course it requires effort from both sides.”

While US President Joe Biden has made clear his focus remains on protecting American jobs, European officials hope his administration will make trade ties with the United States more predictable than during the Donald Trump presidency.

German Economy Minister Peter Altmaier described the talks with Tai as “extremely constructive”.

“I think we are entitled to say that there is a historic window of opportunity to resolve trade disputes between Europe and the US,” he told reporters.

Earlier this week the Commission, which oversees EU trade policy, declared a partial truce in a three-year dispute over US tariffs on steel and aluminium, saying it would not impose retaliatory tariffs on more US products.

“All in all, it’s now more than 100 days since the Biden administration entered office and we have seen many positive developments and much more active engagement,” Dombrovskis said.

Dombrovskis said US metals tariffs and the EU’s initial retaliatory duties from 2018 should be removed as soon as possible, and in any case by the end of the year. He said both the EU and the United States were working on this timeline.

Separately, 12 EU countries including Germany, called for an extension of steel “safeguard” quotas beyond their expiry at the end of June to protect industry from a flood of imports.

Dombrovskis said the Commission should present a proposal in early June, adding there was a difficult balance to be made between steel-making and steel-consuming industries.

“If we extend beyond three years, as would be the case, we open ourselves to legal retaliation by third countries,” he continued.

EU likely to impose safeguard measures on steel imports by mid-July

As the trade war with the US escalates, the EU is considering imposing provisional safeguard measures on steel imports, Trade Commissioner Cecilia Malmström told the press on Tuesday (26 June).

Another area of emerging consensus between the EU and United States is the need for a tougher line on China. Their partial truce included a joint statement on the need to “hold countries like China that support trade-distorting policies to account”.

Separately, the European Parliament on Thursday halted ratification of an investment pact with China until Beijing lifts sanctions on EU politicians, deepening a dispute in Sino-European ties and denying EU companies greater access to China.

The resolution to freeze ratification passed with 599 votes in favour, 30 votes against and 58 abstentions.

Beijing’s punitive measures, blocking travel to China and business with its companies, were imposed in March in response to Western sanctions against Chinese officials accused of the mass detention of Muslim Uyghurs in northwestern China.

EU lawmakers say the Chinese sanctions are not based on international law, while the bloc’s measures tackle abuses of human rights upheld in United Nations treaties. Beijing denies any wrongdoing.

Despite all the tensions, Germany earlier announced that exports to China in April rose by 16.3% year-on-year to €8.4 billion . It also said exports to the United States leaped by more than 60% to €10.1 billion in the same period, underlining the importance of trade to Europe’s top economy.

Steelmakers call for 'Green Deal' to counter Chinese dumping

European steelmakers were already reeling from dumped Chinese imports and US tariffs when the coronavirus pandemic hit this year. According to trade body Eurofer, it will take two years for the industry to recover, a process it says could be accelerated with a new “Green Deal for steel” and a carbon border levy.

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