WASHINGTON • The United States and Europe were expected to announce a five-year suspension of tariffs in their 17-year-old dispute over aircraft subsidies yesterday, allowing them to focus on the threat posed by China's nascent commercial aircraft industry, people familiar with the matter said.
A deal to pause the world's largest corporate trade dispute would help US planemaker Boeing and Europe's Airbus, while granting relief to dozens of other industries affected by tit-for-tat tariffs that were suspended in March.
They face a renewed trade war within weeks if there is no progress.
US Trade Representative Katherine Tai discussed the dispute in her first face-to-face meeting with her European Union counterpart Valdis Dombrovskis on Monday, ahead of yesterday's US-EU summit, where China will also be a key topic.
Ms Tai travels to Britain today.
The European Commission, which oversees EU trade policy, and the US had vowed to find a solution by July 11, when the currently suspended transatlantic tariffs are due to resume.
Officials had targeted a permanent solution through a pair of treaties - one between the US and EU, the original parties, and another between Washington and London, following Britain's exit from the EU - on new ground rules for aerospace.
But reaching a detailed accord has proved complex, given nearly two decades of legal wrangling and thousands of pages of documents, said one source briefed on the talks.
A standstill agreement would push back the resumption of tariffs by years at a time when US President Joe Biden has vowed to reset relations with European partners after four tumultuous years under his predecessor Donald Trump.
The tariffs on US$11.5 billion (S$15.3 billion) of goods were progressively imposed from 2019 after both the US and the EU won partial victories at the World Trade Organisation (WTO) over claims of unfair aid for Boeing and Airbus.
The dispute has dragged on since 2004, when the US withdrew from a 1992 aircraft subsidy pact and took the EU to the WTO, claiming that Airbus had managed to equal Boeing's share of the jet market, thanks in part to subsidised government loans.
The EU counter-sued over what it termed unfair research and development support and subsidised tax incentives for Boeing.
In recent months, top European, British and US officials have engaged in intense discussions to settle the dispute and focus on other challenges, including China.
The US has floated a joint review of aerospace funding in non-market economies such as China, two of the people said.
One of the sources said the two sides had agreed to increase information sharing, but gave no further details.
REUTERS
