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WTO Rules Tariffs Should Be Reduced By $2 Billion After Compliance Measures: Airbus
"The US Trade Representative now should accept the reality that loans made to Airbus in the early 2000's -- for the development of a product that is no longer being sold -- do not have an impact on Boeing sales."
Photo Credit : Bloomberg
European planemaker Airbus has said the United States should immediately reduce 7.5 billion dollars in tariffs that the World Trade Organisation (WTO) authorised in October by around two billion dollars.
This is the direct result of a panel finding that loans for the development of A380 no longer have an impact on Boeing sales and therefore the value of lost sales no longer exists, Airbus said. "The US Trade Representative (USTR) now should accept the reality that loans made to Airbus in the early 2000s -- for the development of a product that is no longer being sold -- do not have an impact on Boeing sales."
The panel also asserted that amendments already made to the A350 loan agreements are not sufficient to fully align the loans with market conditions. Based on these findings, Airbus will support to appeal this report as per WTO rules.
In May last year, the WTO appellate body clarified that the European Union (EU) and Airbus have achieved compliance with respect to the vast majority of measures at issue but considered that some adjustments were needed to the A380 and A350 loans or to remedy their market effects.
Measures have therefore been taken on both programmes relating to the respective loans of members states or on the market effects those loans had on Boeing. Airbus said it remains committed to working with the EU and its member states to comply with the WTO recommendations.
"With the wide range of additional steps to comply with WTO findings since 2018, the EU and Airbus have demonstrated their willingness to ensure a fair trade environment respecting international trade agreements."
By contrast, the concerned US parties have not taken visible action to address its illegal subsidies despite the WTO appellate body findings in April 2019 that the United States had failed to withdraw the subsidies benefiting Boeing or to remedy their market effects through the 737 MAX, 787 or 777X.
The EU therefore requested the WTO's authorisation to impose countermeasures on US imports in line with its estimate of the effects of the US subsidies on Airbus which comes to 12 billion dollars per year. That decision is expected in the spring of 2020 and will provide the EU authorisation to impose tariffs on imports of US products, including Boeing aircraft.
Airbus said it continues to encourage the USTR to accept the European Commission's invitation to engage in meaningful discussions to find a settlement to these disputes. "A negotiated settlement is the only way to restore and preserve the free, fair competition and open trade that is essential for global aviation industry," it said in a statement.