After EU, Britain and US reach truce in aircraft trade dispute
LONDON, June 17 (Reuters) – Britain and the United States agreed on Thursday to resolve a long-standing trade dispute over aid to Airbus and Boeing aircraft manufacturers and to focus on tackling Chinese subsidies, making echo of a five-year tariff truce announced by Washington and Brussels.
Together, the matching deals draw a line under 17 years of battles at the World Trade Organization and establish a common front against “non-market” finance in reference to China’s nascent aerospace industry.
The dispute had sparked a months-long transatlantic tariff war hitting industries such as Scotch whiskey until a temporary tariff ceasefire was called this year to facilitate negotiations.
Tariffs will be suspended for a further five years while governments also pledge to provide any financing on market terms, removing a perennial source of transatlantic tensions.
“This will support jobs across the UK and this is great news for Scotch whiskey and other exports, including aerospace, which will no longer face punitive tariffs,” the UK Minister said. of Commerce Liz Truss on Twitter.
The Scotch Whiskey Association said its members lost 600 million pounds ($ 836.64 million) because of the tariffs. In the United States, the Distilled Spirits Council said American whiskey was still affected by tariffs in a separate dispute over steel and aluminum.
The UK-US aerospace deal came two days after the EU struck a truce with Washington over aircraft subsidies and ended a week of summit diplomacy aimed at countering growing influence from China.
US Trade Representative Katherine Tai called it “a model we can build on to ensure fair competition and address common challenges of China and other non-market economies.”
the The United States and Europe had been fighting since 2004 on subsidies to Boeing (BN) and Airbus (AIR.PA), in the biggest trade dispute on record.
Britain has since left the European Union and Thursday’s almost identically worded deal achieves many of the same results as the EU-US deal.
Britain, whose ability to negotiate trade deals independently from the EU is central to its new position as ‘Global Britain’, has a long history as one of the four main countries involved in Airbus. , a relationship that preceded its accession to the EU, and its British factories are the wings of Airbus commercial jets.
In December, Britain and the United States moved closer to a stand-alone aerospace deal that could have forced Brussels’ hand in its own talks with Washington, but backed down on concerns about jobs in the UK, Reuters reported.
An official familiar with the talks said it had not been possible at that time to reach a balanced deal.
Airbus, which has 14,000 employees in Britain, has repeatedly warned it could move work overseas, restricting Britain’s ability to negotiate independently on aerospace.
The more limited truce agreed this week leaves a system of government loans for Airbus intact on paper, but calls on Britain, France, Germany and Spain to issue any new Airbus development loans to market conditions yet to be defined.
Both sides had achieved partial victories and claimed to have complied with thousands of pages of rulings, but this week’s agreements set aside years of legal wrangling at the WTO, which ruled that past loans d ‘Airbus were illegal while violating support for Boeing.
On the other hand, Britain wants to conclude a free trade agreement with the United States, as it seeks new relations in the world after leaving the European Union in 2020.
($ 1 = 0.7172 pounds)
Reporting by Alistair Smout; edited by Guy Faulconbridge
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