US, UK and EU suspend tariffs in aircraft disputes

 

The European Union and the United States today agreed on the mutual suspension for four months of the tariffs related to the World Trade Organization (WTO) Aircraft dispute, the Office of the U.S. Trade Representative and the European Commission announced.

The suspension will cover all tariffs both on aircraft as well as on non-aircraft products, and will become effective as soon as the internal procedures on both sides are completed.

“This will allow the EU and the U.S. to ease the burden on their industries and workers and focus efforts towards resolving these long running disputes at the WTO,” the joint U.S.-EU statement said.

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“The EU and the U.S. are committed to reach a comprehensive and durable negotiated solution to the Aircraft disputes. Key elements of a negotiated solution will include disciplines on future support in this sector, outstanding support measures, monitoring and enforcement, and addressing the trade distortive practices of and challenges posed by new entrants to the sector from non-market economies, such as China,” the statement said.

The announcement followed a similar one Thursday that the United States and the United Kingdom had reached a a four-month suspension of tariffs related to the large civilian aircraft dispute.

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The Distilled Spirits Council of the United States (DISCUS) said, “The U.S. and EU decision to suspend tariffs for four months signals a promising break-through in the longstanding trade dispute on civil aircraft subsidies, which has left much destruction to the spirits sector in its wake.”

“For nearly three years, American distillers have been collateral damage in the U.S.-EU trade disputes over aircraft subsidies and steel and aluminum tariffs,” DISCUS said.

“Today’s announcement suspends the 25% tariffs imposed by the EU on U.S. rum, brandy and vodka in November 2020,” the group explained.

“In addition, the U.S. is suspending the 25% tariffs imposed on liqueurs and cordials from Germany, Ireland, Italy, and Spain in October 2019, and on certain cognacs and other grape brandies from France and Germany in January 2021.

“Momentum is building for an end to these debilitating tariffs following yesterday’s announcement to suspend U.S. tariffs on U.K. products, including single malt Scotch whisky, in connection with the civil aircraft dispute,” the group said.

“While this is a very positive development, the EU and the U.K. continue to impose a 25% tariff on American whiskey, which will double to 50% on June 1, 2021. This excessive burden is unfair and not sustainable.

“These tariffs have damaged what had been for many years a great American export success story. American whiskey exports to the EU, our largest export market, grew from $502 million in 2008 to $702 million in 2018, an increase of 40%. Since the tariffs were imposed, our American whiskey exports to the EU have declined by 37% and to the U.K. by 53%.

“Until steps are taken to address the dispute over steel and aluminum tariffs, American whiskey — the United States’ largest spirits export category — will remain at a serious competitive disadvantage in our two most important export markets.

“We commend the Biden administration for moving quickly to reset relationships with our trade allies and urge for a speedy resolution that eliminates all of these debilitating tariffs on spirits for good.”

–The Hagstrom Report