Aviation. The European Union and the United States reach an understanding to end the Airbus-Boeing dispute

On 15 June 2021, European Commission Executive Vice-President, Valdis Dombrovskis, and United States Trade Representative, Katherine Tai, have taken a major step in resolving the longest trade dispute in the history of the World Trade Organisation (WTO).

The dispute started in 2004, when the United States filed a case at the WTO, arguing that the European Union had illegally subsidised the European Large Civil Aircraft manufacturer Airbus. In 2005, the European Union also filed a complaint against the United States, for its unlawful support to Boeing. Since both parties had failed to take measures to comply with WTO rules, in 2018 and 2019, the WTO imposed punitive tariffs on each other’s exports, affecting in total a value of 11.5 billion dollars of trade between the two sides. As a result, European and US businesses had to pay over 3.3 billion dollars in duties.

More specifically, with the Understanding on a cooperative framework for Large Civil Aircraft, both sides agreed to suspend, for a period of five years, application of harmful tariffs that damage companies and people on both sides of the Atlantic. Furthermore, by establishing a Working Group on Large Civil Aircraft, led by each side’s respective Minister responsible for Trade, the two sides will collaborate on jointly analysing and addressing non-market practices of third parties that may harm European and US companies in the large civil aircraft sectors. Finally, the parties expressed their intention to follow certain rules on financing, research and development funding as well as specific support of large civil aircraft in order to avoid new disputes.

Esmeralda Dedej