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The EU trade commissioner has said he is increasingly hoping to reach an agreement with the Biden administration to end a 16-year dispute over subsidies to Airbus and Boeing, in what would be a breakthrough in transatlantic trade relations.
Valdis Dombrovskis told the Financial Times that the EU and the US were engaged “very intensely” in resolving their trade disputes, as he hailed a “very welcome change” since Joe Biden’s administration took office. charge in January.
Discussions on aircraft subsidies are a particular focus, given the shared desire in Brussels and Washington to end a dispute that over the past two years has led each party to hit the other with punitive tariffs on trade worth billions of dollars.
These duties (for a wide range of products, from French wine to US sugar molasses), are currently suspended after the EU and the US. agreed in March raise them for four months, creating the political space for negotiations.
“Work is underway and I think there is reason to hope that we will be able to resolve this issue and that we will not have to go back to this mutual imposition of tariffs,” Dombrovskis said.
Dombrovskis said both sides were working on new rules, known as disciplines, on future grant arrangements for the airline sector. Asked whether the talks could be successful in the four-month period announced on March 5, the commissioner said: “We are currently working on this timetable.”
The dispute is one of the longest cases in the history of the World Trade Organization. Over the years, it has become clear that both parties have not been able to properly implement the resolutions of the WTO panel on illegal subsidies.
Valdis Dombrovskis: “Work is underway and I think there are reasons to hope that we can solve this problem” © Francisco Seco / Pool / Reuters
Its consequences have become increasingly tangible in recent years, with the United States achieving European exports worth $ 7.5 billion with additional tariffs in October 2019, while the EU imposed additional duties. to US $ 4 billion in exports the following year. Both sets of measures were in line with WTO rulings in favor of each party.
“I hope we can fix it and leave it behind,” Dombrovskis said.
Brussels has proposed to the U.S. a broader suspension of punitive tariffs lasting six months, a measure that would cover duties related to Trump-era tariff increases on imported steel and aluminum. So far, Washington has not picked up on the suggestion.
Dombrovskis said the EU was seeking the suspension of steel and aluminum tariffs to “jointly address the root cause of the problem, which is the global overcapacity of steel,” resulting mainly from Chinese production.
“So far we are waiting for concrete reactions. . . on this proposal, “Dombrovskis said.” From our point of view, this would be the best solution. “
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He said co-operation with the new US administration, including its trade representative Katherine Tai, was increasing on issues such as WTO reform and how to address the “challenges posed by China’s socio-economic model”.
Brussels has also submitted proposals to the US for the creation of a Trade and Technology Council to develop standards in cutting-edge areas such as artificial intelligence.
“I would say the first reactions. . . in general they are positive, “Dombrovskis said.” We also expect more specific US reactions. [We’re] ready to debate and find a solution that suits both parties ”.
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