THE United States told the World Trade Organisation yesterday it has fully complied with WTO findings that Washington state’s now-repealed tax breaks for Boeing were illegal and there was “no valid basis” for the European Union to retaliate against US goods.
The formal submission to the WTO aims to neutralise the EU’s demand for retaliatory demands for some US$10 bil annual retaliatory tariffs in a long-running Boeing-Airbus subsidy dispute, the US. Trade Representative’s office said.
The WTO last year granted Boeing the ability to levy tariffs on US$7.5 bil worth of EU goods, including aircraft, wines and cheeses, due to Airbus subsidies deemed illegal.
USTR raised tariffs on Airbus planes to 15% from 10% on March 17, but many airlines are delaying deliveries as the coronavirus pandemic has halted most travel.
Washington state’s legislature in March repealed the preferential aerospace tax break first introduced 16 years ago, which saved Boeing some US$118 mil in 2018 based on published jetliner revenues.
“With Washington State’s repeal of this relatively minor tax reduction, the United States has fully implemented the WTO’s recommendation, ending this dispute,” US Trade Representative Robert Lighthizer said in a statement. “This step ensures that there is no valid basis for the EU to retaliate against any US goods.”
The WTO is widely expected to issue a decision on the EU retaliation demands in June. Meanwhile EU officials have emphasized their desire to negotiate an end to the dispute, which dates back to 2004.
An Airbus spokesman could not be immediately reached for comment on the USTR notification.
Boeing last week declined to seek aid from the US government US$17 bil coronavirus relief fund for aerospace and other national security-linked firms after it raised US$25 bil in a corporate bond offering.
USTR launched formal negotiations with Britain on Tuesday for a post-Brexit free trade agreement between the transatlantic allies. – May 7, 2020, Reuters
