Urgent calls for de-escalation in the EU-US civil aircraft dispute

Date:

(Brussels, 16 October 2020) Following the WTO arbitrator’s decision earlier this week on the level of countermeasures the EU may now apply with respect to the Boeing subsidy dispute, we urge the EU and the US to settle the conflict once and for all, in order to prevent further escalation of trade tensions and damage to industries on both sides of the Atlantic.

FoodDrinkEurope, representing Europe’s food and drink industry, wishes to stress that for nearly a year now, a wide range of EU food and drink products have suffered from US retaliatory tariffs of 25%. These impact competitiveness and have led to a decline in the exports of a number of key EU product categories to the US, traditionally the EU food and drink industry’s first foreign destination with a value of exports exceeding €22 billion in 2019. 

It is deeply regrettable that Europe’s food and drink manufacturers, 99% of which are small and medium-sized enterprises, have become collateral damage in a dispute, which has its origin in a completely unrelated sector.

As the EU and Member States consider next steps following the WTO arbitrators’ latest decision, political leaders should be mindful of the fact that the US is both a key market for EU goods and a critical source of supply for agricultural commodities and ingredients. Retaliation in this area will have broader negative implications for supply chains, as well as workers and consumers on both sides of the Atlantic, at a time when they are already weakened by the Covid-19 pandemic and the economic slowdown.

We therefore urge the EU and the US to engage in a constructive dialogue to swiftly resolve the aircraft disputes, to drop punitive tariffs already in place, and to avoid the risk of further escalation of trade tensions. All efforts should focus on a positive trade agenda to strengthen our long-standing transatlantic trade relations and support the economic recovery from the global COVID-19 crisis.

 

Background

Please see below the recent developments of the dispute:  

  • 2 October 2019: WTO arbitrator issues decision in Airbus subsidy dispute. 
  • 12 August 2020: USTR announcement about the modification to the list of EU products subject to additional duties and the list of amendments effective on 1 September 2020.
  • 13 October 2020: WTO arbitrator issues decision in Boeing subsidy dispute.

Please also refer to FoodDrinkEurope’s statement on the WTO decision on the Airbus dispute (3 October 2019)

Download the statement ( pdf - 148KB )