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The aircraft transaction between the European Union and the United States heralds a new trade cooperation in the Biden era –

The first summit between the European Union and US President Joe Biden ended on Tuesday (June 15) and reached an agreement on a five-year suspension of tariffs in the long-standing dispute between Airbus and Boeing. The challenge paved the way. model.

After 17 years of legal disputes over subsidies for its large aircraft manufacturers in Europe and Washington, the President of the European Commission Ursula Vonderlein announced an agreement that will suspend the two parties’ The 11 billion U.S. dollars in tariffs levied for a period of five years. motorcycle.

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The agreement will extend the truce period since March and will set a series of parameters to limit the financing provided by European governments and US authorities to its aircraft manufacturers.

“This really opened a new chapter in our relationship as we moved from litigation to aircraft cooperation-after 17 years of disputes,” Von der Lein told reporters after the Brussels summit.

“This shows the new spirit of cooperation between the EU and the United States. We can solve other problems for mutual benefit,” she added.

For the United States, the agreement is an opportunity to bring the transatlantic partnership closer to meet the increasingly severe challenges represented by China, including in the field of civil aviation.

Focusing on Beijing, the two parties agreed to cooperate to resolve issues that may harm their respective large-scale civil aircraft industries by non-market behaviors of third parties.

Biden said in a statement: “This is a model we can build to meet other challenges posed by China’s economic model.” Contrary to common practice, he did not speak to reporters after the summit with EU leaders.

After the summit, U.S. Trade Representative Katherine Tai (Katherine Tai), in a speech to a group of media including EURACTIV, emphasized the importance of the agreement not only for resolving 17-year disputes but also for broader economic relations. .

Biden’s chief trade negotiator said: “This is a test of our relationship and our ability to build confidence and trust. This will bring us into a future where competition will become increasingly fierce.”

Steel tariff

However, the EU and the United States have not made substantial progress in resolving other tariff disputes triggered by the Trump administration’s decision to punish EU steel and aluminum exporters.

The summit concluded that the two sides “will hold discussions to resolve existing differences on measures regarding steel and aluminum before the end of the year.”

Von der Lein told reporters that Brussels and Washington need “a little more time” because the primary task of negotiators before the summit is to make progress on the aircraft dispute. But she is confident that a solution will be reached before the end of the year.

Dai emphasized the importance of transforming the current tensions between the EU and the United States into cooperation in the steel and aluminum industries, because both parties have “responsibility” for their companies and workers to solve the problem of overcapacity driven mainly by China.

But she does not want to promise what results can be achieved in the next five and a half months, because the EU and the United States will have to face “tricky problems” and “deep feelings.”

The United States imposes tariffs on imported steel and aluminum on grounds of national security because Washington believes they may pose a threat to an industry that is vital not only to the economy but also to the country.

These responsibilities are designed to protect industries and workers in the states associated with the 2022 midterm elections in the United States.

New agency

WTO reform is one of the priorities to better address China’s unfair trade practices. The two sides pledged to update the WTO’s rulebook to “provide more effective punishments for industrial subsidies, state-owned enterprises’ unfair practices, and other trade and market behaviors.” . -Distorted approach. “

In addition, Brussels and Washington will cooperate to resolve the “long-term problems” of the WTO’s dispute settlement system, which was suspended due to the US blockade of the nomination process for new members of the Appellate Body.

The two sides also agreed to establish a new EU-US Trade and Technology Commission to strengthen cooperation on technology, digital issues and supply chains, as well as standards and regulatory policies, and seek integration as much as possible.

In view of the current shortage of semiconductors and the concentration of manufacturers of these strategic products in Asia, the European Union and Washington pledged to establish an EU-U.S. partnership aimed at rebalancing the global semiconductor supply chain, enhancing supply security and producing “the most powerful and resource-efficient semiconductors.” “

The EU and the United States also announced their intention to establish a joint technology competition policy dialogue to discuss competition policy and law enforcement methods in the technology sector.

[Edited by Zoran Radosavljevic]

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