The EU trade chief hopes to reach an agreement with the US to end the Airbus-Boeing dispute

The EU trade commissioner has said he is increasingly hopeful of reaching an agreement with the Biden administration to end the 16-year dispute over subsidies for Airbus and Boeing, which would be a breakthrough in transatlantic trade relations.

Valdis Dombrovskis told the Financial Times that the EU and the US are “very vigorously” resolving their trade disputes, praising “a very welcome change” since Joe Biden’s administration took office in January.

The debate over airline subsidies is particularly noteworthy, as the conflict that has pushed Brussels and Washington to end the conflict over the past two years has come to an end, with each side facing billions of dollars in trade tariffs.

These obligations, starting with French wine and a wide range of products for US sugar molasses, are now suspended after the EU and the US they agreed in March raising it for four months, creating a political space for negotiations.

“The work is ongoing and I think there are reasons that we will be able to solve this problem and we will not return to this mutual imposition of tariffs,” Dombrovskis said.

Dombrovskis said the two sides are working on new rules, known as disciplines, around subsidies for the future airline sector. Asked if the talks could be successful in the four-month window announced on March 5, the commissioner said: “We are currently working on the timeline.”

The conflict is the longest-running case in the history of the World Trade Organization. Both sides have found over the years that they have not properly complied with WTO rulings on illegal subsidies.

Its effects have become increasingly pronounced in recent years, with the US hitting additional tariffs on $ 7.5 billion in European exports in October 2019, and the EU imposing additional taxes on US $ 4 billion on exports the following year. The two sets of measures were in line with the WTO decisions in favor of each side.

“We hope to fix it and leave it behind,” Dombrovskis said.

Brussels has proposed to the U.S. a broader six-month suspension of tariff tariffs – a move that would cover taxes on imported steel and aluminum related to Trump-era tariff increases. The suggestion has not been received by Washington so far.

Dombrovskis said the EU is seeking to suspend tariffs on steel and aluminum to address “the root cause of the problem, which is the overcapacity of global steel,” mainly as a result of Chinese production.

“So far we are waiting for concrete reactions. . . about that proposal, “Dombrovskis said.” From our point of view that would be the best solution. “

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He said the collaboration with the new US administration, Trade Representative Katherine Tai, is growing in terms of how to deal with WTO reform and “the challenges posed by China’s socio-economic model”.

Brussels has submitted proposals to the US to create a Trade and Technology Council to develop standards in cutting-edge areas such as artificial intelligence.

“I would say the first reactions. . . they are generally positive, “Dombrovskis said.” We are waiting for more specific reactions from the US. [We’re] ready to discuss and find a solution that suits both sides. ”