WTO rejects European Union bid to stop USA tariffs over Airbus

WTO rejects European Union bid to stop USA tariffs over Airbus

WTO rejects European Union bid to stop USA tariffs over Airbus

European sources said the decision to drop references to the A380 causing lost sales to Boeing had cut about $2 billion from a list of harms worth $7.5 billion that had driven the WTO's decision to allow US tariffs up to the same amount.

A World Trade Organization panel ruled Monday that the European Union has not complied with an order to end illegal subsidies for plane-maker Airbus, which prompted the Trump administration to impose tariffs on almost US$7.5 billion worth of EU goods in October.

The Airbus case centres on so-called launch aid from the European Union that WTO judges ruled had impeded sales for aircraft from Boeing in the twin-aisle and very large aircraft markets.

An initial compliance panel had found that the European Union was breaking the rules but previous year Brussels asked for a second panel to weigh in, arguing that it had modified its behaviour.

As a responsive measure to the WTO's conclusion, the United States said it could impose tariffs on a broader range of European goods, as it seeks to assert its authority in the long lasting dispute between the world's two principle constructors of airplanes - Airbus and Boeing.

It therefore found that earlier rulings in the case, which paved the way for the historic U.S. penalty, "remain operative".

The European Commission said it took note of the report, adding it contained a number of serious legal errors.

"The report also contains statements concerning workable ways to comply with the WTO rules on subsidies that would be very problematic for a larger part of the WTO membership to comply with".

Airbus said in its own statement that it would support such an appeal. This is the direct result of the WTO panel finding that the loans for the development of the A380 no longer have an impact on Boeing sales and that therefore the value of the lost sales no longer exists.

The European aviation company said its position was to end all the pending trade disputes over its aircraft through the talks that the European Commission has initiated with United States authorities.

The EU is seeking to retaliate against United States tariffs that have affected European agriculture in early 2020, upon authorisation by the WTO.

By contrast, the concerned USA parties have not taken visible action to address its illegal subsidies, despite the WTO Appellate Body findings in April 2019 that the U.S. had failed to withdraw the subsidies benefiting Boeing, or to remedy their market effects through the 737 MAX, 787 or 777X.

But both Washington and Brussels have indicated a desire to negotiate a solution to the epic airline industry spat and avoid the tit-for-tat tariffs.

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