BRUSSELS/PARIS: Transatlantic trade ties face renewed disruption this week when global arbiters are expected to grant the United States a record award allowing it to hit European imports with billions of dollars of tariffs in a long-running aircraft subsidy dispute.
The World Trade Organization (WTO) has found that both European planemaker Airbus and its US rival Boeing received billions of dollars of illegal subsidies in a pair of cases that have run for 15 years.
Both sides have threatened tariffs after the Geneva body found neither adhered fully to its findings. However, the United States has a head start, with the European Union having to wait until early in 2020 to hear what level of retaliation it can exact over Boeing.
The WTO is expected this week to reveal the amount of EU goods the United States can target. People familiar with the case say the three-person tribunal is expected to award it around $7.5 billion, a record for the 24-year-old watchdog.
Such retaliation rights are rarely granted by the WTO — most parties reach settlements — and in many cases complainants do not exercise their rights. The United States though has indicated it will target EU goods to the fullest extent.
It has already published a $25 billion list from which it will pick items to target from aircraft and aerospace parts to wine, cheese and luxury goods.
The WTO award in the world’s largest corporate trade dispute could fuel already strained trade tensions, diplomats say.
EU manufacturers are already facing US tariffs on steel and aluminium and a threat from US President Donald Trump to penalise EU cars and car parts. The EU has in turn retaliated. — Reuters
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