On Friday, April 12, the U.S. Trade Representative (USTR) initiated an investigation to enforce the United States’ rights resulting from the World Trade Organization (WTO) dispute that the US filed against the European Union (EU) challenging EU subsidies on large civil aircraft.
The action that USTR is proposing is the levy of additional duties on products of the EU or certain member States, to be drawn from a preliminary list published with the notice of investigation. The list is extensive and includes a number of food and beverage items, such as wines and cheeses.
As part of the investigation USTR is asking for public comments, either in writing or at a public hearing in connection with its proposed determinations.
By way of background, this matter first arose in October 2004 when the United States requested WTO dispute settlement consultations with what is now the EU, France, Germany, Spain, and the United Kingdom with respect to subsidies provided to Airbus. The U.S. argued that these subsidies violated the EU’s and its member states’ WTO obligations under several agreements. In 2011, a WTO panel report confirmed that the subsidies violated the EU’s obligations under the Subsidies Agreement.
Since the 2011 WTO determination, the U.S. and the E.U. have been unable to resolve the matter. In May 2018, a WTO Dispute Settlement Body panel and Appellate Body confirmed that the E.U’s subsidies to Airbus continued to cause WTO-inconsistent adverse effects on the United States. In July 2018, a WTO Arbitrator re-started the process to determine the level of countermeasures that the U.S. will be entitled to levy against the E.U. in retaliation. USTR anticipates that the WTO Arbitrator’s report will be released this summer