WTO gives US final authorisation to impose tariffs on EU products

The World Trade Organisation (WTO) has given United States the final authorisation to impose tariffs on European Union (EU) products in retaliation for illegal subsidies given to Airbus. Earlier in October 2019, a WTO arbitrator gave US the green light to slap tariffs on US $7.5 billion worth of European Union imports.

The move comes as a landmark moment in the 15-year legal battle between Airbus and American plane-maker Boeing.

Key Highlights

WTO Ruling: WTO has found that both Airbus and its United States’ rival Boeing received billions of dollars of illegal subsidies in a pair of cases that have now run for nearly 15 years. An adjudication or arbitrators award in the Boeing case is due in 2020.

The arbitrator’s award, which is the largest in WTO’s history was rubber-stamped by the Dispute Settle Body (DSB) of WTO which is made up of representatives from its 164 members. At a special meeting, the WTO’s DSB cleared US to take countermeasures against EU and Airbus-producing countries Britain, Germany, France and Spain.

Proposed Tariffs: Even though United States have stated that it will impose a 10% tariffs on Airbus planes and 25% duties on a range of products, such as French wine, Scottish whiskies and cheese from across the continent which could be in place by 18 October 2019, but the EU officials are trying to reach a negotiated settlement with US so as to avoid escalating trade tensions that risk battering economies across the globe.

Parallel Dispute Over Subsidies: However, in case the negotiations fail to produce a deal, then EU will get the chance to impose its own WTO-approved tariffs on billions of dollars of U.S. exports, after convincing WTO judges that Boeing had benefited from illegal US government subsidies for domination of the world aircraft market.


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