Five-year truce reached over Boeing-Airbus aid dispute

A five year truce has been negotiated between the U.S and EU concerning the 17-year spat over aircraft subsidies provided to Boeing and Airbus that were seen as unfair. As a consequence, many of the Trump-era retaliatory subsidies have also been suspended.

Since 2004 both planemakers have taken their case to the World Trade Organization (WTO) in which they have both argued that subsidies received by either company resulted in unfair competition against the other. In March this year a four-month suspension of tit-for-tat tariffs by both sides were suspended, which included those placed on EU cheese and wine, and U.S. tobacco and spirits. It is hoped that during the five-year suspension agreement, the two sides will reach an agreement on what support could be provided to either Boeing, Airbus, or other major aircraft manufacturers, and in particular that both sides would work to counteract investments made in aircraft production by “non-market actors”, specifically China.

“Grounding the Airbus-Boeing dispute delivers a major confidence boost for EU-U.S. relations,” EU trade chief Valdis Dombrovskis told a news conference after an EU-U.S. summit with U.S. President Joe Biden. “The deal…includes a commitment for concrete joint collaboration to confront the threat from China’s ambitions to build an aircraft sector on non-market practices,” stated U.S. Trade Representative Katherine Tai. Both sides said they were confident the Airbus/Boeing dispute would indeed end within five years.

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