United States could increase tariffs after WTO rejects European Union denials over Airbus subsidies
- by Leona Burton
- in World Media
- — Dec 3, 2019
In Monday's ruling, a three-person panel rejected European Union claims that a recent decision by Airbus to stop producing the slow-selling A380 meant the airliner could no longer be seen as a threat to Boeing, the American multinational corporation whose competing 747 faces falling demand.
The ruling reinforces an earlier WTO decision which allowed the United States to retaliate with tariffs on 7.5 billion USA dollars in European Union exports.
A World Trade Organisation panel has ruled that the European Union has not complied with an order to end illegal subsidies for European plane maker Airbus that prompted the Trump administration to impose tariffs on almost $7.5 billion worth of EU goods in October.
Following the October decision, the USA enacted tariffs covering Airbus planes and various consumer goods, including whisky, cheese and olives.
The European Union is almost certain to appeal.
More news: Flood rescuers killed in helicopter crashIt therefore found that earlier rulings in the case, which paved the way for the historic United States penalty, "remain operative".
The European Commission, the EU's legislative branch, is considering appealing as they believe the WTO's findings contained serious legal errors.
"The report also contains statements about workable ways to comply with WTO rules for subsidies that would be very problematic for a larger part of WTO membership", the statement added.
Airbus said in a statement of its own that it would back such an appeal.
Based on these findings, Airbus would support to appeal this report, as per WTO rules.
More news: Arsenal keeper Leno reveals Ljungberg reaction during Norwich drawThe European planemaker added that the WTO ruling should lead the USA to "immediately reduce" the tariffs it was authorised by the WTO in October to impose "by around $2 billion".
The reason is that the assistance that Airbus received in the early 2000s for the A380 programme have stopped harming the U.S. aerospace company due to the fact that the giant European plane is no longer being sold and production is set to come to an end because the aircraft has not sold as expected when it was conceived.
While the WTO no longer faulted Airbus for causing lost sales to Boeing with the A380, which is no longer marketed, it ruled that the superjumbo would continue to cause market-share damage to Boeing for as long as it is produced and delivered.
While EU trade commissioner Cecilia Malmstrom has insisted that "we are not in a trade war", the WTO is set to hear a European counter-case against Boeing next year, indicating more battles to come.
Both Washington and Brussels have indicated a desire to negotiate a solution to the epic airline industry spat and avoid the tit-for-tat tariffs, however.
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