Trade body calls for global aerospace industry to resolve dispute after WTO ruling on illegal aid to Airbus, which could result in levies of 10 per cent imposed on aircraft imports to the US from the EU

Aerospace trade body ADS has called for a “negotiated solution” to settle a trade dispute which could see punitive tariff levels levied on the import of products into the United States from the European Union.

Yesterday’s decision follows a ruling on a case brought by the US against the European Union in a dispute over trade in large commercial aircraft manufactured by Airbus. The World Trade Organization (WTO) has authorised tariffs to be imposed on nearly $7.5bn of EU goods in annual punitive levies to repair damage done to Boeing through EU aid to Airbus which has been deemed to be illegal.

EU set to take action against illegal aid to Boeing

The WTO will hold a special meeting of its Dispute Settlement Body, requested by the US, on October 14 to adopt the arbitration decision, according to Reuters news agency. The report adds that the United States has said it would enact 10 per cent tariffs on Airbus planes and 25 per cent duties on French wine, Scotch and Irish whiskies and cheese from across the continent as punishment for the illegal EU aircraft subsidies.

A further ruling in the case brought by the EU against the US over its support for Boeing is expected in the coming months. The EU is expected to win approval for its own tariff offensive on illegal aid to Boeing. The rulings are expected to end the long running dispute dating back 15 years over subsidies to both the US and European aerospace industries.

“Negotiated solution” must be found

ADS Chief Executive Paul Everitt said: “Trade disputes and tariffs disrupt healthy competition, threaten jobs, and risk reducing the choice available to consumers, both in the aerospace market and the wider global economy.

“It is in the interest of the whole global aerospace industry that a negotiated solution is found to this dispute, removing the threat of tariffs. This is a sector where low tariffs have helped manufacturers deliver safe, advanced and increasingly fuel-efficient aircraft to our customers around the world.

“We urge the EU and US authorities to work together to find a mutually beneficial solution that sustains open and competitive markets.”

Loans for A380 and A350 deemed ‘illegal’

The WTO ruling follows a decision in May 2018 that the EU had failed to eliminate billions of dollars of illegal aid to Airbus for two passenger aircraft programmes — the A380 superjumbo and the A350 midsized jet. The WTO found loans granted by Airbus’s founding countries — France, Germany, the UK and Spain — were given at non-commercial rates.

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