The WTO has authorized the EU to impose tariffs on US$4 billion of US goods to retaliate against subsidies for US planemaker Boeing Co, people familiar with the matter said.
The delayed award provides a fresh source of potential trade friction weeks before the US’ Nov. 3 presidential election, after Washington last year began imposing tariffs on US$7.5 billion of EU goods over state support for Boeing rival Airbus SE.
The two sides have been locked in a 16-year-old dispute at the Geneva, Switzerland-based WTO over aid to their aircraft industries in a pair of cases that together represent the world’s largest-ever corporate trade dispute.
Photo: Reuters
They were informed of the decision by WTO arbitrators on Friday last week, and the award is expected to be published within weeks.
The US Trade Representative and the EU’s Washington office did not answer requests for comment.
Boeing declined to comment on the confidential WTO report, but accused Airbus of ignoring its recent decision to forgo tax breaks in Washington state to try to resolve the dispute.
Airbus, which has announced its own concessions on funding in France and Spain, was not immediately available for comment.
Sources on both sides said that EU tariffs on products such as Boeing jets, which must still be adopted formally by the WTO, were unlikely to be imposed before the US presidential election as Brussels seeks to avoid inflaming a bitter campaign.
However, both sides are expected to claim victory, with US sources pointing to the higher core tariffs in favor of Boeing.
European sources said that the latest award does not include about US$4.2 billion in tariffs against the US left over from an earlier case, giving the EU US$8.2 billion in total firepower.
The US has said that the previous award, granting the EU tariffs to retaliate against special tax treatment for US exporters, which the EU never implemented, is no longer valid because a law creating the disputed system was repealed in 2006.
The WTO has refused to be drawn into the controversy over unused tariffs, saying that it has nothing to add to previous rulings on the former system of US Foreign Sales Corporations.
The eagerly awaited ruling on EU countertariffs could finally ease years of deadlock, during which both sides signaled interest in settling the aircraft dispute while accusing the other of refusing to talk seriously, analysts said.
“Everybody’s been waiting for this. It sets the stage for a negotiation,” said William Reinsch, a former undersecretary for export administration at the US Department of Commerce and trade expert at the Center for Strategic and International Studies.
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