US gets WTO nod to levy tariffs on EU goods over Airbus

GENEVA • The World Trade Organisation (WTO) formally authorised the United States yesterday to impose tariffs on up to US$7.5 billion (S$10.3 billion) of imports of European Union goods after an arbitrator's decision over subsidies to planemaker Airbus.

The WTO's dispute settlement body, made up of representatives from its 164 members, cleared Washington to take countermeasures against the EU and Airbus-producing countries Britain, France, Germany and Spain.

The authorisation was a formality after a WTO arbitrator awarded the US a record right to retaliate over illegal subsidies this month. It would have been denied only if all WTO members present voted against it.

The meeting lasted less than 20 minutes.

US trade ambassador Dennis Shea told the meeting that Washington still preferred a negotiated solution. "But that can happen only if the EU genuinely terminates the benefits to Airbus from current subsidies and ensures that subsidies to Airbus cannot be revived under another name or another mechanism," he said.

The EU delegation told the meeting that it had "serious concerns", and that US tariff measures were short-sighted. The WTO has found that both Airbus and its US rival Boeing received billions of dollars of illegal subsidies in a pair of cases that has run for 15 years.

An adjudication in the Boeing case is expected early next year.

The US has said it will impose 10 per cent tariffs on Airbus planes and 25 per cent duties on a range of products, including French wine, Scottish whiskies and cheese from across the continent.

 

Last Friday, EU trade chief Cecilia Malmstrom wrote to US Trade Representative Robert Lighthizer, urging him to start negotiations on a settlement for the Airbus and Boeing cases, adding that resorting to tariffs was not a solution.

REUTERS

A version of this article appeared in the print edition of The Straits Times on October 15, 2019, with the headline 'US gets WTO nod to levy tariffs on EU goods over Airbus'. Print Edition | Subscribe