EU Director General Hopes for Mutual Tariff Suspension in Airbus/Boeing During Negotiations

European Union Director General for Trade Sabine Weyand told an audience Jan. 15 that resolving punitive tariffs are “a prerequisite for creating a good atmosphere” so that the EU and the U.S. can coordinate on confronting China's trade abuses and creating a carbon border adjustment.

Weyand, responding to a question during a Center for Strategic and International Studies webinar, said that removing the tariffs that are connected to the Airbus/Boeing dispute is probably more complex than removing Section 232 tariffs on European steel and aluminum. “We thought we were on the road to at least a partial solution” with the U.S., and at least a partial suspension of tariffs, and a set of ground rules on subsidy disciplines in the civil aircraft sector. Weyand called the recent addition of products by the Office of the U.S. Trade Representative “massive,” and a New Year's Eve surprise.

Weyand said that a lot of businesses that have nothing to do with aerospace have been hurt by the tariffs. “We said, OK, it's three weeks to the new administration,” and so the EU decided to hold its fire. Once Joe Biden takes office, she said, “both sides hopefully will agree to suspend the sanctions on both sides and then create space for this negotiation. Maybe not in the first 100 days, but the first six months, we should be able to settle this issue.”

Weyand also addressed the crisis at the World Trade Organization, where there is no director-general and no binding dispute settlement system, and where the only multilateral negotiation underway, on overfishing, blew its end of year deadline. “Joining the consensus in Geneva around the [director general] candidate would create a lot of good will,” she said, and would be a signal of the new administration's commitment to multilateral organizations.

She said she hopes the trilateral dialogue between the U.S., Japan and the EU on how to update WTO rules to manage China's distorting business practices will be revived, and that they would have a proposal ready for the next ministerial conference, which is expected late this year.

One of the listeners asked if talks toward a U.S.-EU trade agreement could be reopened, and Weyand said no. The Transatlantic Trade and Investment Partnership “was an instrument of a different time and a different era,” she said. “An EU-U.S. TTIP-type agreement would do nothing to address the challenges the world trading system faces at the moment,” she said, such as Chinese overcapacity in steel making.