The European Commission Executive Vice President Valdis Dombrovskis and U.S. Trade Representative Katherine Tai reached an understanding this week on principles relating to large civil aircraft. The agreement essentially pushes a pause button on the dispute rather than drawing a line under the argument that has raged for almost 20 years.
In a prepared statement, the two sides stated that they intend to promote their relations in the large civil aircraft sector by moving to a “more collaborative and consultative relationship”. They seek to “promote a level playing field, address shared challenges, overcome longstanding differences, and avoid future litigation”.
The most important aspect of the eight point framework (click here to read in the principals in full) is the agreement to suspend punitive tariffs from both sides for a period of five years, while the working groups set up in principles 1&2 work together to find a way to establish a level playing field in the area of large civil aircraft. The two sides have also agreed to provide any financing to Boeing or Airbus “on market terms”, while any R&D funding will go through an open and transparent process and would not be provided in a way that would cause “negative effects to the other side”.
Reading between the lines in the statement regarding cooperation on non-market economies, the two sides seem to be agreeing that they have a common interest in The European Union and the United States share a common interest in sustaining their large civil aircraft sectors – including large civil aircraft producers, large civil aircraft engine producers, and producers of other large civil aircraft components, parts, or systems – in the face of new state-financed competitors from non-market actors. To more effectively address the challenge posed by non-market economies, the parties will explore concrete ways to intensify their cooperation in these areas.