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U.S., EU agree to end 17-year dispute over subsidies for Boeing, Airbus

By
Zarrin Ahmed
Boeing 787 airliners are seen during assembly at the company's Everett, Wash., plant. File Photo by Jim Bryant/UPI
Boeing 787 airliners are seen during assembly at the company's Everett, Wash., plant. File Photo by Jim Bryant/UPI | License Photo

June 15 (UPI) -- The United States and the European Union on Tuesday ended a long dispute that lasted for nearly 20 years over government support for plane manufacturers Airbus and Boeing by agreeing to a five-year truce.

The dispute dates back to 2004 when the EU complained that U.S.-based Boeing was receiving billions in unfair subsidies from federal and state governments. It wasn't long before the U.S. government responded with a similar complaint about France-based Airbus.

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The row ultimately included billions in tariffs related to both companies and years of failures to resolve the impasse.

U.S. officials at the EU-U.S. Summit in Belgium, where President Joe Biden met Tuesday with top EU leaders, said both sides agreed to end the dispute.

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"Instead of fighting with one of our closest allies, we are finally coming together against a common threat," U.S. Trade Representative Katherine Tai told reporters, saying the deal "resolves a longstanding trade irritant in the U.S.-Europe relationship."

"We agreed to work together to challenge and counter China's non-market practices in this sector in specific ways that reflect our standards for fair competition."

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The deal removes government subsidies for both companies in the production of passenger planes until at least 2026.

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Part of the agreement is aimed at growing concerns over Chinese state-sponsored aircraft manufacturer Comac, which is expected to become a major rival to Airbus and Boeing by the end of the decade.

The White House said both sides agreed to four general principles that will guide future cooperation -- the suspension of tariffs, a working group to "analyze and overcome" disagreements, ensuring that workers and industries compete on a "level playing field" and confronting the Chinese "threat."

"Together, we wrote the rules of the road based on democratic values, fair competition, and transparency after World War II and we need to work together to update these rules," the White House added.

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"The U.S. and EU will work together in specific ways that reflect our high standards, including collaborating on inward and outbound investment and technology transfer," Biden said in a statement. "It's a model we can build on for other challenges posed by China's economic model."

Officials said the suspension of tariffs -- which amounted to $11.5 billion in exports over five years -- will take effect on July 11.

Under the deal, the United States can reactivate the tariffs if EU officials don't hold up their end of the deal.

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The United States and EU agreed in March to suspend the tariffs for four months as a measure to open the door to a longer-term agreement to end the Boeing-Airbus dispute.

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