Home » The EU and the US agree on a ceasefire in the aviation subsidy case

The EU and the US agree on a ceasefire in the aviation subsidy case

by archyw

US President Joe Biden and the European Union (EU) agreed on Tuesday on a long-term ceasefire in a 17-year dispute over subsidies to the aviation industry.

The ceasefire was formally confirmed at a summit in Brussels, at which Biden met with Charles Michel, President of the European Council, and Urzul von der Leien, President of the European Commission (EC).

Leiena pointed out that the summit had made progress in resolving long-standing differences. “This really opens a new chapter in our relationship, as we can move from litigation to cooperation in the aviation industry,” said the EC President.

The US and the EU have agreed on a five-year ceasefire, explaining to both sides that this will allow enough time to resolve existing differences.

Disputes between the EU and the US began in 2004 when the United States withdrew from the airline subsidy pact and took action against the EU in the World Trade Organization (WTO), claiming that Airbus had been able to compete with Boeing, thanks in part to subsidized government loans. The EU also appealed to the WTO against the US over unfair state aid and subsidized Boeing tax breaks.

As Valdis Dombrovskis, Vice-President of the European Commission (EC), explained to LETA, the EU and the US are the world’s largest trade and investment partners. This is not only an economic but also a political partnership rooted in shared values ​​and a global vision.

“At today’s US-EU Summit, leaders agreed to strengthen this transatlantic cooperation to jointly address the challenges of the time, including the strengthening of authoritarian regimes and technological competition in the world. This strengthening of relations is very important for the Baltic States, including Latvia, given our geographical location and belonging to a democratic world, “said Dombrovskis.

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He said the dispute between the two major airline manufacturers, Airbus and Boeing, was the longest dispute in the history of the World Trade Organization. It lasted 17 years and was linked to the way in which both parties received state support for the development and introduction of new aircraft on the market.

“The agreement was virtually impossible due to the vastly different systems, and the dispute cost billions of euros a year in tariffs to exporters on both sides. An agreement was reached today to lift these tariffs for five years. In parallel, the EU and US committed to work on a common understanding “The two sides also agreed to work together to combat unfair competition in countries that massively subsidize their companies,” said the EC vice – president.

Dombrovskis noted that one of the most important results of the summit is the EU-US Trade and Technology Council, which will address issues related to the digital and data economy, new technologies, creating secure supply chains and other issues important for both countries to maintain international leadership. He said that at a time of rapid technological development, it is important what standards of goods and services become the norm in the global market, and this is an area where EU – US cooperation needs to be strengthened.

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