Today’s announcement resolves a longstanding trade irritant in the U.S.-Europe relationship. Instead of fighting with one of our closest allies, we are finally coming together against a common threat.
The White House
June 15, 2021
11:09 A.M. CEST
MODERATOR: Good morning, everyone. Thank you so much for joining us today on this briefing with United States Trade Representative Ambassador Katherine Tai. This will be an on-the-record briefing, and it will be embargoed until the conclusion of the pool spray that will take place at the top of the U.S.-EU Summit meeting with President Biden.
By joining this call, you are agreeing to these ground rules. With that, I’m going to go ahead and pass it off to Ambassador Tai, who is here to provide you an update on some Boeing Airbus news.
Ambassador Tai, off to you.
AMBASSADOR TAI: Thank you so much, Vedant. Let me just do a tech check here and make sure that you can hear me.
MODERATOR: Loud and clear.
AMBASSADOR TAI: Super. Thank you. At the outset of this trip, the President has been clear that his goal is to demonstrate the capacity of democracies to both meet the challenges and deter the threats of this new age. And he was also clear that he wanted to demonstrate that the U.S. could lead the world’s democracies in a foreign policy for the middle class. Today’s announcement that the U.S. and EU have reached a 5-year agreement in the 16-year-long Boeing-Airbus dispute does just that.
Today’s announcement resolves a longstanding trade irritant in the U.S.-Europe relationship. Instead of fighting with one of our closest allies, we are finally coming together against a common threat. We agreed to work together to challenge and counter China’s non-market practices in this sector in specific ways that reflect our standards for fair competition. This includes collaboration on inward and outbound investment and technology transfer.
This is a model that we will use to build on for other challenges posed by China and non-market economic competition. The President routinely says that we are strongest when we work with our friends and allies. Today’s announcement is a demonstration of just that in action.
The U.S. and EU’s agreement marks significant progress towards achieving a long-term solution to this 16-year dispute. This deal will shore up the longer-term competitiveness and innovation of a key sector — aircraft — that is one of the most important sources of middle-class jobs at home.
The airspace sector employs over 500,000 workers directly and supports over 700,000 jobs in related industries. Boeing itself employs over 140,000 workers across all 50 of the United States. Through Boeing’s supply chain, it purchases over a billion parts from over 10,000 American businesses. Supporting Boeing means supporting good-paying jobs and a strong supply chain here at home.
The United States and the European Union are home to 780 million people who share democratic values and the largest economic relationship in the world. Together, after World War Two, the U.S. and countries in the EU wrote the rules of the road based on democratic values, fair competition, and transparency. The President believes that, today, we need to work once again with our like-minded allies to update these rules.
This agreement comes during the U.S.-EU Summit — an opportunity to rebuild the U.S.-EU ties, raise the ambition of our relationship, and commit to working together on common challenges.
A renewed trade and investment partnership with the European Union is a top priority for the administration, and our early efforts have been successful thanks to the work of President Biden and the rest of the administration.
This deal will ensure that our workers and companies in this key sector can compete on a level playing field. And this deal allows us to start turning the page on this longstanding dispute, to work together to address our shared concerns with unfair and coercive economic practices, and to ensure standards for fair competition.
I’m going to walk through part of this deal and try to be as clear as I can presenting this orally. As part of this deal, we have, first of all, suspended the U.S.-EU tariffs that were authorized by the WTO that are related to this dispute for a total of five years, while retaining flexibility for the United States — let me take a step back.
These tariffs will remain suspended so long as EU support for Airbus is consistent with the terms of this agreement. Should EU support cross a red line and U.S. producers are not able to compete fairly and on a level playing field, the United States retains the flexibility to reactivate the tariffs that are being suspended.
We have also, with the EU, agreed to clear statements on acceptable support for large civil aircraft producers and a cooperative process to address that support between our two parties and to overcome our longstanding differences.
With respect to China — this particular piece — we have committed to meaningful cooperation on countering investments in the aircraft sector by non-market actors in our economies to acquire technology know-how and also outward investments into China that are made pursuant to non-market forces.
We have also pledged to identify where joint work is needed to take parallel action against other non-market practices. And we have committed to sharing information regarding these and other areas to forego [sic] — sorry — to forge a common approach in the large civil aircraft sector.
Let me stop here and turn this back over to you, Vedant.
MODERATOR: Thanks so much, Ambassador Tai. The Ambassador has a very tight schedule and limited time, but is happy to take a couple of questions. So, if you have a question, please use the “raise hand” function on the Zoom interface, and we’ll get through what we can.
Why don’t we start with Jennifer Jacobs from Bloomberg. Please unmute yourself.
Q Good morning. Yes, can you say — will Airbus have to repay the subsidies? Will Airbus have to pay back those subsidies? And also when does the deal go into effect exactly?
AMBASSADOR TAI: So, this deal will go into effect, I think — let me take your second question first.
I mean, in terms of the particular interest with respect to the tariffs, as you know, on March 11, the U.S. and the EU agreed to a four-month suspension of the tariffs to create room for this negotiation and for this agreement to come together. So the implementation of this agreement will occur in terms of extending that suspension for five years by July 11.
Your other question relates to the Airbus subsidies. Now there are a number of subsidies, but, again, I’ll interpret your question related to ones that are outstanding. And the answer there is that the agreement provides for continued discussion between the parties on outstanding and current subsidies to Airbus for the existing aircraft, which remain a concern for the United States.
We’ll continue to confer to address these outstanding support measures.
MODERATOR: Thanks, Ambassador Tai.
Next, let’s go to Michael Shear with The New York Times.
Q Hey, thanks a lot. I guess I just wanted to know – you’ve talked about what the United States has agreed to do vis-à-vis the tariffs on the EU. I assume the agreement has the reciprocal — the same reciprocal agreement on their counter tariffs, correct?
AMBASSADOR TAI: That’s correct. And I’m sorry, I’m — I appreciate that when I say “we” — sometimes it’s unclear if I mean “we,” the United States, or “we,” the U.S. and the EU.
And that’s right, the commitment to extend the tariffs applies to both sides.
MODERATOR: Thanks so much, everybody. Unfortunately, that is all the time that we have this morning.
Again, as a reminder, this call was on the record, but embargoed until the conclusion of the pool spray that will take place at the top of the U.S.-EU Summit meeting with President Biden. Again, this is on the record, but embargoed until the conclusion of the pool spray at the top of the U.S.-EU meeting.
Thank you all for joining us, and we’ll talk to you all soon.
11:19 A.M. CEST