When the World Trade Organisation (WTO) ruled in favour of Boeing against Airbus in the dispute about Government support, it gave the green light to the US Government to impose penalty tariffs on EU exporters to the US.
Airbus has taken a similar action against Boeing and the expectation has been that the WTO would find in favour of Airbus even though the decision isn’t expected until September.
If that is the case it would allow the EU to impose retaliatory tariffs on the USA.
Relevance to Irish farmers
What makes this relevant to Irish farmers is that Irish butter, cheese, cream liqueurs and pig meat were among the EU products targeted by the US for a 25% retaliatory tariff.
The US is a relatively small market for Irish pigmeat exports and there are better alternatives in Asia. However, it is a major export market for Irish butter, cheese and cream-based liqueurs and the tariffs have had the effect of making these products much more expensive in that market.
Airbus compliance
Last Friday, Airbus announced that it was moving to full compliance on the WTO ruling which found that loans provided by the French and Spanish were effectively illegal aid.
European Commissioner for Trade Phil Hogan meeting Robert Lighthizer (left), US Trade Secretary, in January.
Airbus has now agreed that these loans would be restructured on to a commercial basis as the WTO had requested. Logic suggests that if the reason for the US imposing tariffs by way of penalty on the EU has been removed, so too should the tariffs.
US politics versus EU’s strong hand
However, politics has to be considered. How likely is President Trump in an election year to give priority to removing tariffs that hit European suppliers and protect US dairy?
Airbus and the EU can go back to WTO but with the original case taking 16 years, that is a slow process and there is no guarantee that the US would comply in any case with a revised WTO ruling.
This move by Airbus could be useful when the expected ruling against Boeing comes out in September.
This will bring trade relations by the EU and US to a head as the EU would be in a position to impose penalty tariffs as the US has been doing.
Strong hand
If the EU has Airbus in compliance and a WTO ruling comes against Boeing, Trade Commissioner Hogan has a strong hand for negotiation with his US counterpart.
If logic prevails and the US 25% tariff on Irish butter, cheese, and cream liqueurs is removed, it would be a boost to Irish dairy farmers in the final quarter of 2020.
Read more
Shrill opinion doesn’t trump science or economics
US farmers call on Trump to pass country of origin labelling law
US look to cut milk production
When the World Trade Organisation (WTO) ruled in favour of Boeing against Airbus in the dispute about Government support, it gave the green light to the US Government to impose penalty tariffs on EU exporters to the US.
Airbus has taken a similar action against Boeing and the expectation has been that the WTO would find in favour of Airbus even though the decision isn’t expected until September.
If that is the case it would allow the EU to impose retaliatory tariffs on the USA.
Relevance to Irish farmers
What makes this relevant to Irish farmers is that Irish butter, cheese, cream liqueurs and pig meat were among the EU products targeted by the US for a 25% retaliatory tariff.
The US is a relatively small market for Irish pigmeat exports and there are better alternatives in Asia. However, it is a major export market for Irish butter, cheese and cream-based liqueurs and the tariffs have had the effect of making these products much more expensive in that market.
Airbus compliance
Last Friday, Airbus announced that it was moving to full compliance on the WTO ruling which found that loans provided by the French and Spanish were effectively illegal aid.
European Commissioner for Trade Phil Hogan meeting Robert Lighthizer (left), US Trade Secretary, in January.
Airbus has now agreed that these loans would be restructured on to a commercial basis as the WTO had requested. Logic suggests that if the reason for the US imposing tariffs by way of penalty on the EU has been removed, so too should the tariffs.
US politics versus EU’s strong hand
However, politics has to be considered. How likely is President Trump in an election year to give priority to removing tariffs that hit European suppliers and protect US dairy?
Airbus and the EU can go back to WTO but with the original case taking 16 years, that is a slow process and there is no guarantee that the US would comply in any case with a revised WTO ruling.
This move by Airbus could be useful when the expected ruling against Boeing comes out in September.
This will bring trade relations by the EU and US to a head as the EU would be in a position to impose penalty tariffs as the US has been doing.
Strong hand
If the EU has Airbus in compliance and a WTO ruling comes against Boeing, Trade Commissioner Hogan has a strong hand for negotiation with his US counterpart.
If logic prevails and the US 25% tariff on Irish butter, cheese, and cream liqueurs is removed, it would be a boost to Irish dairy farmers in the final quarter of 2020.
Read more
Shrill opinion doesn’t trump science or economics
US farmers call on Trump to pass country of origin labelling law
US look to cut milk production
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