Close agreement between the US and the EU on the commercial fight between Boeing and Airbus

And the European Union are close to a deal that would suspend their trade dispute over government subsidies to Boeing Co. and Airbus SE.,

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in a sign of easing from trade tensions, said a senior EU official.

European Commission President Ursula von der Leyen said Tuesday that she is “very positive and convinced” that an agreement would be announced later that day. “It is in our common interest to resolve it,” he said of the dispute.

A resolution to the 17-year trade fight, the longest and most costly in the history of the World Trade Organization, would significantly reduce trade tensions between the two giant and deeply interconnected economies.

Putting aside transatlantic differences on the issue would also allow the allies to jointly focus on China, which is making heavily subsidized efforts to develop large airliners.

While China faces challenges catching up with Boeing and Airbus, both are concerned that Chinese-made airliners pose a major commercial threat to their big sales in the world’s most populous country and others in the economic orbit of Beijing. . China currently accounts for a quarter of its aircraft deliveries.

The two sides agreed in March to a four-month suspension of tariffs on planes and a variety of other products, including wine and whiskey, in an effort to reach an agreement and improve strained bilateral relations.

A deal would come at a crucial time for the two aircraft makers, struggling with the pandemic-driven slowdown in air travel that has left many customers unwilling or unable to take on new planes.

Boeing is also deciding whether to launch a new airliner, with much of the long-standing dispute involving government loans, contracts and other support for clean-sheet aircraft.

The two parties agreed to suspend tariffs related to both parties’ complaints filed with the World Trade Organization. The suspension reflects the easing of trade tensions between Washington and its trading partners following the aggressive trade policies of former President Trump, who argued that global trading partners had long taken advantage of the United States.

Biden has said she wants to work closely with allies, and US Trade Representative Katherine Tai said during her confirmation hearing that she was eager to resolve the aircraft dispute.

The freeze between the US and the EU was accompanied by a similar agreement between the US and the UK, in which both countries suspended retaliatory tariffs in the aircraft dispute for four months.

The Airbus-Boeing dispute began in 2004 when the United States filed a complaint with the WTO, alleging that EU subsidies for Airbus put Boeing at a disadvantage. Under the Trump administration, the dispute evolved into a tariff fight that trapped food and beverage industries unrelated to aircraft manufacturing. Washington imposed tariffs on European food and wine worth 7.5 billion dollars in late 2019.

The EU struck back with levies on US whiskey, nuts and tobacco valued at around $ 4.5 billion. The United States stepped up sanctions on Dec. 31 with additional tariffs, putting virtually all French and German wine imports under its 25% tariff.

In the aircraft manufacturing industry, passenger jet deliveries are well below their pre-pandemic levels as the drop in travel demand led cash-strapped airlines to postpone or cancel orders. However, some customers have said that fees, and who pays them, are still a limitation on the number of deliveries.

Delta airlines From Inc.

The expansion of its Airbus fleet made it one of the US airlines hardest hit by the EU action, while Ryanair Holdings PLC’s planned delivery schedule of the Boeing 737 MAX made it the most exposed European airline this year. Ryanair is still waiting for its first MAX due to quality issues that forced Boeing to halt deliveries.

The carriers have not disclosed whether they or the manufacturer previously paid the fees.

Write to Daniel Michaels at [email protected] and Doug Cameron at [email protected]

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