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EU-US reach deal on ending 17-year dispute over Boeing-Airbus

US President Joe Biden as well as his French counterpart Emmanuel Macron hailed the resolution of the 17-year dispute between Washington and Brussels over aircraft subsidies.

A Japan Airlines Boeing 767-300ER plane takes off as a Philippine Airlines Airbus A330-300 plane taxis on the runway of the Ninoy Aquino International Airport (NAIA) terminal 1 in Pasay city, metro Manila, Philippines January 11, 2018.
A Japan Airlines Boeing 767-300ER plane takes off as a Philippine Airlines Airbus A330-300 plane taxis on the runway of the Ninoy Aquino International Airport (NAIA) terminal 1 in Pasay city, metro Manila, Philippines January 11, 2018. (Reuters Archive)

The United States and the European Union have reached a deal to end a damaging dispute over subsidies to rival plane makers Boeing and Airbus and phase out billions of dollars in punitive tariffs.

“The agreement we found now really opens a new chapter in our relationship because we move from litigation to cooperation on aircrafts and that after almost 20 years of disputes,” European Commission President Ursula von der Leyen has said on Tuesday while announcing the deal.

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Both sides said they would also work together to analyse and address the “non-market practices of third parties that may harm our large civil aircraft sectors,” according to the EU’s executive branch.

The trade dispute skyrocketed under the Trump administration, and saw duties slapped on a range of companies that have nothing to do with aircraft production, from French winemakers to German cookie bakers in Europe and US spirits producers in the United States, among many others.

The US imposed what could have amounted to $7.5 billion (6.1 billion Euros) in tariffs on European exports in 2019 after the World Trade Organization ruled that the EU had not complied with its rulings on subsidies for Airbus, which is based in France.

The EU retaliated last November with up to $4 billion (3.2 billion Euros) in punitive duties after the WTO ruled that the US had provided illegal subsidies to Seattle-based Boeing.

In March, weeks after Biden had taken office, the two sides agreed to suspend the tariffs. That suspension started on March 11 for four months.

The new agreement will officially go into effect on July 11.

Macron deal

French President Emmanuel Macron hailed the truce as proof of a “new relationship” between the two powers.

“With the agreement reached on the Airbus-Boeing dispute, American tariffs on French products, including wine, have been lifted. These are the first results of our new relationship with our American partners,” he tweeted in English, welcoming it as “good news” for French wine producers.

Biden welcomes agreement

US President Joe Biden also welcomed the “major breakthrough” in the Boeing-Airbus trade dispute and an agreement with the European Union to counter China’s “non-market practices.”

The US president arrived in Geneva on Tuesday after the deal with the European Union was announced following talks in Brussels.

“Both the US and EU agreed to suspend our tariffs for five years, and we committed to ensuring a level playing field for our companies and our workers,” Biden said in a statement.

“Significantly, we also agreed to work together to challenge and counter China’s non-market practices in this sector that give China’s companies an unfair advantage.”

Biden said the United States and European Union would work together in specific ways, including on inward and outbound investment and technology transfer.

“It’s a model we can build on for other challenges posed by China’s economic model,” he said.

He said “values like fair competition and transparency” that were shared by the United States and EU made democracies everywhere stronger.

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