The United States and the European Union have announced an agreement on Tuesday to end their long dispute over subsidies from aircraft manufacturers Airbus and Boeing, the first draft pact that marks the opening of a new stage in black on white. beyond good words. The parties have agreed to suspend for five years the tariffs that had been crossed as a result of this conflict, for a value of 10,300 million.
The agreement, forged within the framework of the first bilateral summit between President Joe Biden, with the President of the European Council, Charles Michel, and the President of the European Commission, Ursula von der Leyen, shows Washington’s change of course, which It is committed to softening its trade front with partners on the other side of the Atlantic in order to make a common front against unfair competition from the Chinese authoritarian regime.
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“America is back, maybe we never left at all,” Biden told the press moments before the summit began. The American has highlighted the good harmony with NATO and the EU, marking a distance with the former president of the United States, Donald Trump, explicitly. “I have a very different vision from my predecessor,” said Biden. “The last four years have not been easy,” the head of the Community Executive replied.
Ambassador Katherine Tai, United States High Representative for Trade, explained in a call to the press that this type of pact represents “the model” that the United States will use “in other challenges posed by China and other competitions that are not followed by the [modelo] from [libre] market”. The levies had already been frozen for four months last March, a first indication of a cycle change with the Democrat in the White House, while the parties negotiated.
The dispute of the aeronautical industry began in 2004 with a series of complaints crossed by the subsidies granted by both blocks to their main airplane manufacturers. Washington got out of a pact of aid for the sector and sued the EU before the World Trade Organization (WTO) alleging that Airbus had received subsidies from European governments. The EU responded with a complaint of tax incentives for Boeing by the US.The World Trade Organization (WTO) declared them illegal in both cases, so in 2019 it gave the green light to the US Administration to apply retaliation on products. from the EU worth € 6.9 billion and in 2020 allowed the 27 to pass their own round worth € 3.4 billion on US sales.
The EU-US bilateral summit on Tuesday is the first attempt to bury the trade hatchet that Donald Trump wielded for four years. The appointment comes just six months after Joe Biden took over from the US presidency and marks the beginning of a better understanding between Brussels and Washington, although far from the dream of a great transatlantic trade liberation agreement like the one negotiated with the Obama administration and that never came to fruition. Both parties are now conforming to sectoral pacts, especially in the area of technological standards to set the stage for China.
The president of the European Commission, Ursula von der Leyen, had been shortly before the meeting “very convinced” that the commercial dispute over subsidies to the aeronautical companies Airbus and Boeing would be resolved during the summit with Biden. Von der Leyen.
The summit also tries, albeit without any signs of success, to end the tariff war unleashed by Trump to protect the steel sector. and from US aluminum, allegedly hit by unfair competition from other countries, including Europeans. In this area, the dispute seems further from resolution, due to the resistance of the Biden delegation to accept a firm commitment to the withdrawal of the taxes adopted during the last presidency.
The draft conclusions prior to the start of the summit states that “we welcome the initiation of discussions to address our mutual interest in preserving these neuralgic industries. [siderurgía y aluminio] and we are determined to chart a path that would strengthen our democratic alliance and allow the resolution of the current differences before the end of the year ”.
Brussels wants a more specific formulation, as in the case of Airbus-Boeing, where the date of July 11, 2021 is even set as the deadline to finalize the dispute. But Biden’s team is reluctant, at least in the pre-summit contacts, to accept too specific a deadline given that the removal of tariffs can have repercussions on the polls in the states where these industries are located, a fearful cost in the face of it. to the electoral appointments of 2022 in which Trump hopes to return to the load.
Progress will be more fluid in what both Brussels and Washington describe as “starting a positive agenda and establishing an effective platform for cooperation.” The first tangible fruit of the new understanding will be the creation of a high-level forum, dubbed the EU-US Trade and Technology Council, dedicated to boosting transatlantic trade and investment.
The new Council will be tasked with ironing out potential trade barriers and paving the way for a policy alignment on both sides of the Atlantic in the digital sector. The collaboration will also focus on ensuring the security and reliability of supply chains in the technology sector to avoid excessive dependence on third countries and the sudden lack of some essential supply as has occurred during the pandemic with microchips.
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