The EU is allowed to counteract aviation subsidies or provide an opportunity to resolve disputes
. Will the WTO ruling allow Europe and the United States to shake hands?
(Global hot spots)
On October 13, the World Trade Organization (WTO) issued an arbitration ruling allowing the European Union to impose tariffs and other trade penalties on US$3.99 billion worth of goods and services each year on the grounds that the United States illegally subsidized the aircraft manufacturer Boeing.
In October last year, the WTO violated EU regulations to subsidize aircraft manufacturer Airbus, authorizing the United States to impose tariffs and other retaliatory measures against approximately US$7.5 billion of EU goods and services exported to the United States each year.
According to the latest WTO ruling, the EU will have the right to take countermeasures against the tariffs previously imposed by the United States.
The EU and US subsidy disputes over Boeing and Airbus began in 2004.
Expert analysis believes that the WTO’s ruling of “playing 50 boards each” may lead to an escalation of trade tensions between Europe and the United States, and may also provide an opportunity for the two parties to resolve a 16-year dispute.
50 boards each
On October 13, the WTO issued an arbitration report showing that between September 2012 and September 2015, the Washington state government used tax cuts to subsidize Boeing in violation of regulations, causing Airbus aircraft sales and import and export losses.
Therefore, the EU has the right to impose tariffs and other retaliatory measures on US imports of goods and services that do not exceed US$3.99 billion each year.
The WTO arbitration agency determined last year that Boeing received at least US$5 billion in government subsidies that were prohibited by international trade standards.
The US subsequently stated that the government should only be fined up to US$412 million for improper support of Boeing, while the European Union said that the penalty should be nearly US$8.6 billion.
The final decision in the WTO arbitration on the 13th was nearly 10 times the amount claimed by the US side, which was less than half the amount claimed by the European side.
The WTO ruling is not partial to the EU.
In October last year, the WTO also authorized the United States to impose tariffs on US$7.5 billion worth of EU goods due to the EU's illegal subsidies to aircraft manufacturer Airbus.
"WTO's ruling is'fifty boards for each.'" Ding Chun, director of the Center for European Studies of Fudan University, analyzed this reporter. As the two giants in the global aviation and aircraft manufacturing fields, Boeing and Airbus have pinched each other dozens of times. Years.
Both the United States and the European Union have the problem of providing illegal subsidies to their respective aviation companies.
The WTO's ruling is suspected of "harmony", and its follow-up results depend on the interactive effects of both parties.
The WTO arbitration this time is the final ruling and cannot be appealed.
On October 15, US President Trump stated that if the EU really imposes tariffs, the United States will “intensify its efforts to fight back”.
From the US perspective, the Washington State involved in the arbitration has eliminated Boeing’s tax cuts, and the EU lacks a legal basis for seeking additional tariffs.
However, the European Union pointed out that the United States continued to levy taxes on the Airbus A380 after making similar concessions to the European side.
The WTO pointed out that the tax cuts that the US has cancelled are not enough to prevent the EU from being authorized to impose tariffs.
While the White House was making harsh words, the US Trade Representative also proposed a compromise plan.
Several people familiar with the matter told Reuters that the United States has proposed to resolve the long-term dispute with the European Union over aircraft subsidies. If Airbus repays the billions of dollars in subsidies provided by European governments, the United States will cancel the payment of wine, whiskey and other European products. Tariffs.
However, in the face of the ruling, the EU has yet to announce a specific timetable for retaliation.
"Financial Times" reported that the EU still needs to formally apply for authorization to the WTO to impose tariffs, and the application will be submitted as early as October 26 during the WTO dispute settlement mechanism meeting.
But Reuters reported that the EU may not make this decision before the US election.
Release nootropic signals
"WTO's ruling is expected, reflecting the current tense trade relations between the United States and Europe." Wang Shuo, deputy director of the Institute of European Studies of the China Institute of Modern International Relations, told this newspaper that the United States and Europe are currently in a stalemate. The reasons are There are two: First, the competition between Airbus and Boeing in the global market is very fierce, and everyone refuses to give up; second, there is a serious lack of mutual trust in the US-EU trade negotiations, especially the unilateralist actions of the United States that make the US-EU trade disputes unable to pass multilateral negotiations. Way to solve it.
The European and American aviation subsidy disputes have lasted for 16 years.
According to Reuters, the EU and the United States mutually sued each other for illegal subsidies to their aircraft manufacturers in two cases that constitute the world's largest corporate trade dispute so far.
Since 2004, this aviation industry subsidy dispute has "consumed" thousands of pages of testimony, causing an estimated loss of US$100 million.
The British "Financial Times" reported that 2004 coincided with Airbus's delivery volume surpassing Boeing for the first time.
The U.S. filed an arbitration on EU aviation subsidies that year. Since the 1970s, it has calculated the EU's illegal subsidies, saying that Airbus has received $22 billion in illegal funding.
The EU also filed an arbitration a few months later, accusing Boeing of accepting $23 billion in improper aid.
"However, for this WTO ruling, the response of both sides in Europe and the United States is relatively slow. This is completely different from the previous adjustments in which the two sides called each other'fight' and strongly demanded countermeasures." In Ding Chun's view, although it was allowed to impose tariffs on the United States However, the European Union did not say that it would immediately implement tariffs and retaliate against the United States, but instead sent a signal to promote peace.
Although the United States stated that if the EU imposes tariffs, the United States will take countermeasures, but its tone is not so strong.
"Additional tariffs are not in the economic interests of either party, especially when we try our best to recover from the recession caused by the new crown pneumonia epidemic," said Valdis Donbrowskis, Executive Vice President of the European Commission and EU Trade Commissioner. It is hoped that the United States and Europe will take a positive and constructive attitude to determine the next step.
He called on the US to abolish the tariffs imposed last year, "this will generate positive economic and political momentum and help us find consensus in other key areas."
Ding Chun analyzed that there are two reasons why the European and American sides have such an attitude: First, in the past few years, the two sides have threatened each other to impose tariffs, and no one has truly become a winner. Both sides understand that mutual harm cannot solve the problem, and escalation of disputes will only hurt both sides. ; Second, the current time point is relatively delicate. The EU is cautious and wait-and-see attitude towards US domestic politics and will not act rashly.
Wait-and-see turning point
"The trade dispute between Europe and the United States is no longer a simple economic and trade issue. It also involves political issues. It is a reflection of the cracks in the transatlantic alliance." Wang Shuo analyzed that the United States and Europe are mutually hurting each other because of the issue of aviation subsidies. The problems facing the aviation industry are not beneficial.
The EU hopes to use the WTO ruling as a bargaining chip to negotiate with the United States.
However, whether it is based on the current domestic political situation or the current government's consistent logic in handling trade issues, the United States is unwilling to return to the negotiating table.
"Will the European and American trade war begin soon?" The report in the German "Business Daily" was full of worries.
Although trade tensions between the United States and the United States may escalate due to WTO arbitration rulings, according to the Associated Press, arbitration may also prompt the United States and the United States to initiate "intensive negotiations" to prevent disputes from evolving into "trans-Atlantic retaliatory" trade sanctions.
Reuters quoted people familiar with the matter as saying that the United States and the European Union have begun to discuss the framework for future dispute settlement negotiations in informal settings, but openly still maintain a strong stance.
The European Commission confirmed that it has received the first US response to its July proposal to end the dispute.
"This is the first time we have received some substantive feedback from the United States on our recommendations. We have responded and are ready to continue discussing countermeasures."
Ding Chun analyzed that the aviation subsidy dispute is only a sensitive point of the disputes in the economic and trade fields of Europe and the United States.
The EU wants to use the opportunity of this WTO ruling to calibrate the economic and trade relations between Europe and the United States.
But until the domestic political direction of the United States becomes clear, the EU does not expect to take measures to further intensify disputes.
And when the current US government is overwhelmed by domestic politics, it will not take the initiative to escalate the US-EU trade friction.
Recently, the European and American aviation industries have called on the two sides to resolve their disputes.
Boeing issued a statement stating that instead of threatening American companies and their European customers and escalating problems, Airbus and the European Union should focus on their sincere efforts to resolve long-term disputes.
Airbus Chief Executive Guillaume Forry also stated that Airbus "supports a negotiation process that can lead to a fair solution...it is time to find a solution to eliminate tariffs on both sides of the Atlantic."
"WTO's 50-board ruling is a double-edged sword for US-Europe trade relations. The key depends on how the United States and Europe handle it." Ding Chun said that to some extent, the ruling has given the United States and Europe a chance to promote peace. Opportunity.
If the two sides can carefully reflect and negotiate, the US-EU trade relationship may usher in a turning point.
However, if both sides use the ruling as a weapon and escalate trade frictions, US-EU trade relations will further deteriorate.