Airbus Agrees to Changes in Government Support in Effort to Avoid U.S. Tariffs
July 24 2020 - 5:25AM
Dow Jones News
By Pietro Lombardi
Airbus SE has agreed with the Spanish and French governments to
change some financial-support agreements in an attempt to bring an
end to a yearslong trade dispute with the U.S.
The European plane maker said Friday that it thought the move
would put it in full compliance with World Trade Organization
guidelines and remove justification for U.S. tariffs.
The U.S. has for years argued that Airbus benefits from European
government subsidies that have harmed the U.S. aerospace industry
and its workers. Last year, it won authorization from the WTO to
impose tariffs in response, and swiftly introduced levies on $7.5
billion worth of aircraft, food products like cheese and other
goods from the European Union.
Earlier this year it said it would increase tariffs on aircraft
coming from the EU while the dispute remained unsolved.
Airbus said Friday it wanted to end the dispute, which it said
was adding to a difficult environment amid the coronavirus
pandemic. European industries targeted by U.S. tariffs in the
dispute have pressed Airbus and their governments to resolve the
dispute because the new levies are compounding economic pain from
the pandemic.
It has agreed to change a so-called Repayable Launch Investment
-- essentially government subsidized loans to help develop and
produce new aircraft -- related to its A350 jetliner to abide by
parameters considered appropriate by the WTO.
This decision demonstrates "that Airbus has left no stone
unturned to find a way towards a solution," Chief Executive
Guillaume Faury said.
The EU said in a statement that the move made "a strong case for
a rapid settlement" of the dispute.
U.S. officials had no immediate comment.
It remains unclear whether the European move will satisfy U.S.
negotiators. WTO disputes, including previous fights over aviation,
have gone through multiple and protracted rounds of concessions
that one side said brought compliance but the other rejected.
The dispute over aircraft subsidies dating back to 2004 and has
become part of the Trump administration's trade negotiations with
Europe. The two sides have been in formal negotiations since 2018
over a range of trade issues but have made little progress.
The WTO is expected to rule later this year on a related case
brought by the EU against U.S. subsidies of Boeing. At that point,
the EU could be authorized to strike back with tariffs of its
own.
Write to Pietro Lombardi at Pietro.Lombardi@dowjones.com
(END) Dow Jones Newswires
July 24, 2020 05:10 ET (09:10 GMT)
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