Is this the epilogue of a fifteen-year-old conflict? Airbus made a gesture of appeasement in the conflict between it and Boeing before the World Trade Organization, announcing on Friday that it would be "in full compliance" with WTO rules, in the hope of obtaining the “immediate” lifting of punitive tariffs imposed by Washington.
To fully understand what we are talking about, you should know that in parallel with the industrial war that the two competitors are waging, a commercial dispute has been between them since 2004. The European aircraft manufacturer and its American competitor are indeed competing in front of the world trade organization through Brussels and Washington, which lodged two simultaneous complaints denouncing the public aid granted to each of the two groups, deemed illegal by both sides. It is the longest and most complicated trade dispute dealt with by the WTO.
Latest step in this case, the WTO, deeming illegal European aid for Airbus, last October authorized the United States to impose taxes on nearly 7.5 billion dollars (6.8 billion euros ) European goods and services imported each year. This is the heaviest sanction ever imposed by the WTO.
Fall in line to lift the sanctions
Washington has since imposed punitive tariffs on certain products imported from the European Union (including wine, cheese and olives) up to 25%. Customs taxes of 10% on Airbus planes were raised to 15% in March. They also affect the American airlines which equip themselves with the European aircraft manufacturer, Airbus point.
Weakened by these sanctions, "especially at a time when industries are severely affected by the consequences of the Covid-19 crisis", Airbus, which was not legally obliged to do so, therefore announces that it has come into compliance with the rules of the WTO in order to "remove any justification for US tariffs".
Concretely, the European aircraft manufacturer has reached an agreement with the Spanish and French governments to increase the interest due on the reimbursable advances granted by Paris and Madrid during the launch of the A350 long-haul aircraft program. This system of reimbursable advances makes it possible to limit the financial risks taken by an industrialist when launching large-scale projects. Interest rates now "correspond to what the WTO considers to be the appropriate interest rates and risk assessment criteria," says Airbus.
And now ?
On the European side, the intentions are now clear: "Unjustified customs duties on European products are not acceptable," European Trade Commissioner Phil Hogan said on Friday, calling on the United States to lift them "immediately" after the Airbus announcements.
"In the absence of a regulation, the EU will be ready to make full use of its own sanction rights," he warned. “If the United States continues to refuse an amicable negotiation, the European Union will have no choice but to adopt tariff sanctions against American products […]. We are determined to ensure that our rights are respected, ”added the French Minister of the Economy, Bruno Le Maire.
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The ball is therefore now in the American court, on which hangs moreover a sword of Damocles: in a mirror procedure, the EU waits for the WTO to authorize it to also impose customs duties in response to subsidies undue payments this time by Washington to the American aircraft manufacturer. The decision should be made in September or October, depending on the source familiar with the matter.
