The Spanish Government welcomes the five-year suspension of tariffs between the US and the EU
The Government of Spain welcomes the decision to suspend, for a period of five years, all tariffs imposed between the United States (US) and the European Union (EU) in the context of the World Trade Organisation (WTO) disputes in the large civil aircraft sector, as announced by the European Commission (EC) during the EU-US Summit.
The Minister for Industry, Trade and Tourism, Reyes Maroto, underlined that: “The agreement reached represents a historic step towards ending the longest-running trade dispute within the WTO, and definitively eliminating tariffs that have weighed down the Spanish aeronautical and agri-food industries, as well as being able to recover Spanish export and investment operations in the US market, which is key for our companies and for the recovery of the Spanish economy.”
The Minister for Agriculture, Fisheries and Food, Luis Planas, welcomed the announcement, as Spanish agri-food exports to the United States, including olive oil, wine, cheese and citrus fruits, were “unfairly” taxed. “This is great news. We are back on the path of multilateralism that should never have been abandoned. Dialogue, collaboration and consensus-building must take precedence over unilateral actions that generate unnecessary trade imbalances and conflicts.”
A working group
On the basis of the agreement, both sides have agreed on a set of general principles to guide mutual cooperation in the large civil aircraft sector.
To this end, a joint EU-US working group is to be set up to resolve any disagreements that may arise between the parties in an amicable and collaborative manner. In addition, this working group is tasked with further developing the principles and disciplines underpinning this mutual cooperation.
Finally, the agreement contains an annex on cooperation in relation to non-market economies, with the aim of encouraging collaboration between the US and the EU in jointly analysing and addressing non-commercial practices of third countries that may harm their respective large civil aircraft industries.
Airbus-Boeing cross-cases
This is the oldest and most complex dispute between the US and the EU. In the framework of WTO dispute settlement proceedings, both sides have imposed additional tariffs on each other’s imports, with repercussions outside the aeronautical sector.
In the case of the measures imposed by the US, the additional tariffs imposed on EU imports, amounting to approximately USD 7.5 billion, were 10% for aeronautical industry products and 25% for certain agri-food products, and applied as of 18 October 2019. These additional tariffs affected important Spanish agri-food products, including bottled olive oil, bottled still wines (with less than 14% alcohol), green olives, cheese, citrus fruits, pork and canned shellfish.
In relation to the measures imposed by the EU, in November 2020, the Commission adopted the Implementing Regulation and the list of products on which tariff countermeasures were applied to the US amounting to approximately USD 4 billion, as a countermeasure to illegal subsidies to the US aircraft manufacturer Boeing.
On 5 March 2021, the US and the EU reached an agreement to suspend all tariffs imposed in the context of these disputes for an initial period of 4 months, until 11 July 2021, while committing to work towards a balanced and mutually satisfactory solution to this dispute.
