American Boeing and European Airbus have been arguing about subsidies since 2004. Now the EU and the US are dropping the punitive tariffs that have been introduced in the case over the next five years.
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The EU and the US have resolved the almost 17-year subsidy dispute between Boeing and Airbus.
This is what the head of the European Commission, Ursula von der Leyen, says ahead of a meeting with President Joe Biden in Brussels.
– This meeting has started with a breakthrough about aircraft. This really opens a new chapter in our relationship because we are moving from lawsuits to cooperation on aircraft – after 17 years of strife, says von der Leyen, according to Reuters.
Parallel cases at the WTO
Since 2004, the United States and the European Union have conducted two parallel cases before the World Trade Organization (WTO) concerning the American aircraft manufacturer Boeing and the European competitor Airbus.
Both companies have accused each other of having received illegal subsidies, and both have won cases in the WTO.
Penalties
The agreement that has now been entered into will terminate punitive duties that have been introduced in connection with the cases. It will last for the next five years, said trade representative Katherine Tai from the USA on Tuesday, according to Wall Street Journal.
“Today’s announcement solves a long-standing trade irritation between the United States and Europe,” Tai said Reuters.
A four-month break in the tariffs has already been introduced, and this will be extended from 11 June, according to the representative.
It was former President Donald Trump who in his time introduced tariffs worth 7.5 billion dollars on European goods after the WTO ruled that the EU gave illegal subsidies to Airbus, writes CNBC.
Shortly afterwards, the EU introduced $ 4 billion in tariffs on US goods following the same WTO ruling on the US and Boeing.
Boeing shares rose around 0.6 percent in pre-trade on Wall Street after the news, while Airbus was up 0.5 percent on the Paris Stock Exchange.
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