EU tariffs on U.S. goods eyed in aircraft subsidy case

   The European Commission has released a preliminary list of products from the United States on which the European Union may impose import tariffs in response to the ongoing Boeing dispute at the World Trade Organization (WTO).
   A public consultation period on the proposed imports will last through May 31.
   On April 11, the WTO adopted its final compliance report in the Boeing dispute, confirming that U.S. subsidies to aircraft manufacturer Boeing continue to cause significant harm to Airbus, including lost sales. 
   The proposed list of tariffed imports from the U.S. covers myriad products, such as food-grade oils, frozen fish, various handbags and wallets, luggage, farm tractors, playing cards and wines and spirits, for a total of $20 billion in U.S. exports. 
   In 2012, the EU asked the WTO to authorize countermeasures valued up to $12 billion, or the equivalent of the estimated damage caused to Airbus by U.S. support to Boeing.
  The EU said it will be up to a WTO-appointed arbitrator to determine the exact appropriate level of countermeasures.
   The EU originally filed the WTO case against U.S. regarding Boeing in 2006. The U.S. told the WTO Dispute Settlement Body (DSB) in September 2012 that it had withdrawn all subsidies in question and removed their adverse effects.
   The EU challenged the United States’ claim and a compliance panel was established on Oct. 30, 2012. The EU also requested authorization by the DSB on Sept. 27, 2012, to take countermeasures on U.S. imports because of the United States’ failure to comply with WTO findings. WTO proceedings on the request were suspended, at the agreement of both parties, pending the outcome of compliance proceedings.
   In addition to upholding the June 2017 compliance panel’s ruling on Washington state tax breaks, the WTO’s Appellate Body in early April upheld the panel’s ruling that rejected an EU claim that the original adverse effects of pre-2007 U.S. research and development subsidies continued into the post-September 2012 period to cause serious prejudice in relation to sales of Airbus A330 and A350XWB aircraft.
   However, the EU appears to be willing to avoid ultimately applying those tariffs on U.S. imports.
    “While we need to be ready with countermeasures in case there is no other way out, I still believe that dialogue is what should prevail between important partners such as the EU and the U.S., including in bringing an end to this long-standing dispute,” said EU Trade Commissioner Cecilia Malmström in a statement. “The EU remains open for discussions with the U.S., provided these are without preconditions and aim at a fair outcome.”