EU authorities have been granted authority by the World Trade Organization (WTO) to “take countermeasures against the United States,” and “increase its duties on US exports worth up to $4 billion,” according to a press release published by the European Commission.
The retaliation against the US comes at the heels of a dispute between the two parties about the US subsidizing the aircraft manufacturer Boeing.
“Today, the Dispute Settlement Body of World Trade Organization (WTO) formally authorised the EU to take countermeasures against the United States. The EU can now increase its duties on U.S. exports worth up to $4 billion. Today’s decision follows the WTO panel announcement confirming EU retaliation rights in reaction to illegal subsidies granted to the U.S. aircraft maker, Boeing,” the press release reads.
According to a separate announcement published by the European Commission, the US subsidizing Boeing has had a significant adverse impact on the European aircraft manufacturer Airbus. It is also claimed that such actions are illegal.
“The ruling concludes definitively that the US has continued to subsidise the company illegally despite previous rulings condemning this behaviour. This has caused significant harm to its European competitor Airbus,” reads the announcement.
According to Vladis Dombrovskis, the Executive Vice President for an Economy that Works for People and Commissioner for Trade, the EU and US will still be working together to get past the retaliatory measures as well as move in a more cooperative future between the two unions.
“Today’s formal approval by the Dispute Settlement Body of the WTO confirms the EU’s right to impose countermeasures for illegal subsidies to the American aircraft maker, Boeing. The European Commission is preparing the countermeasures, in close consultation with our Member States. As I have made clear all along, our preferred outcome is a negotiated settlement with the U.S. To that end, we continue to engage intensively with our American counterparts, and I am in regular contact with U.S. Trade Representative Robert E. Lighthizer. In the absence of a negotiated outcome, the EU will be ready to take action in line with the WTO ruling,” said Dombrovskis.
The end goal for the EU on the trade dispute with the US was to create a level playing field for competitors in the same industry. The WTO ruling has provided that level playing field and may yield a more promising future for both parties to work together, according to Commissioner for Trade Cecilia Malmström.
“Today’s ruling is a welcome one for the EU, its aircraft-producing industry and workers across EU Member States in this strategic sector. The Appellate Body has now settled this case definitively, confirming our view the US has continued to subsidise Boeing despite WTO rulings to the contrary. We will continue to defend a level-playing field for our industry. European companies must be able to compete on fair and equal terms and today’s ruling is important in this respect,” said Malmström.
Although the WTO has authorized extra duties to be performed on imports to the EU from the US, it is still unclear for how long they will be enforced.