Following the announcement from the EU this week, the United States and the United Kingdom have also reached an understanding to resolve a long-standing trade dispute relating to large civil aircraft. The UK Government stated in a release that the development “strengthens our special relationship and builds on the revitalized Atlantic Charter, which affirms our ongoing commitment to sustaining and defending our enduring values against new and old challenges”.
The framework provides that the U.S. and the UK will work together to overcome any disagreements in the sector and counter non-market practices. It also provides that they will not impose tariffs related to this dispute for five years. The agreement is a model for ensuring fair competition and addressing challenges posed by non-market economies.
In step with the EU principles, the two sides will establish a Working Group on large civil aircraft, to be led by each side’s respective Minister responsible for trade. The Trade Ministers will consult at least yearly. The Working Group will meet on request or at least every six months.
The Working Group will seek to analyze and overcome any disagreements between the sides, including on any existing support measures. The Working Group will collaborate on and continue discussing and developing these principles and appropriate actions.
Each side intends to provide any financing to its large civil aircraft (LCA) producer for the production or development of large civil aircraft on market terms.
Each side intends to provide any funding for research and development (R&D) for large civil aircraft to its LCA producer through an open and transparent process and intends to make the results of fully government funded R&D widely available, to the extent permitted by law. Each side intends not to provide R&D funding, or other support, that is specific, to its LCA producer in a way that would cause negative effects to the other side.
Each side intends to collaborate on jointly analyzing and addressing non-market practices of third parties that may harm their respective large civil aircraft industries. The two sides will implement the annexed understanding on cooperation on non-market economies through the Working Group.
Each side intends not to impose countermeasures for a period of 5 years, starting from 4 July 2021, in the expectation that the other side will contribute to establishing fair competition and to addressing shared challenges from non-market economies.
As part of cooperative framework, the United States and the United Kingdom also released an annex on confronting non-market economies. To more effectively address the challenge posed by non-market economies, such as China, the parties will explore concrete ways to intensify their cooperation in these areas, including information sharing, inward and outward investment, and joint analysis of non-market practices.