At a meeting of the World Trade Organization (WTO) governing body on Monday, the United States cleared the ultimate technical hurdle to impose tariffs on EU products having worth of billions of dollars in the last quarter of this month. Now, Trump’s administration will no longer face any legal consequences to slap previously scheduled sanctions on European goods that might now take effect on Friday. It all done after a three-person WTO tribunal of judges issued a ruling earlier this month that permitted the acting of 7.5 billion dollars of worth of countermeasures, a high amount in the history.
A Geneva trade official said that the ambassador of United States to the World Trade Organization, Dennis Shea told the members of WTO that the size of the awards approved documents, an argument the United States had long made that the subsidies of EU to Airbus produced huge harm to the economy of the United States during the course of many decades. In the absence of negotiated settlement of last-minute between Brussels and Washington, the sanctions will hit a variety of products that range from Italian Cheese, Spanish olives, French wine to Scotch Whisky.
The DSB (Dispute Settlement Body) that adopted the 2nd October ruling of arbitrators is basically the general council of WTO as well as contains all WTO members. According to a senior research person at the Max Planck Institute in Luxembourg, Joshua Paine, the officials of the United States demanded an emergency meeting at the headquarters of WTO on the shores of Lake Geneva, and the results were always going to implement a foregone conclusion.
The United States favored a Negotiated Settlement
According to the account of the trade official, Shea, the U.S. ambassador said that the officials of the U.S. always preferred a negotiated deal whereas that it expected the countermeasures that come into force later this week would encourage the European Union to settle on a genuine termination of its WTO-inconsistent subsidies and the adversative effects that flow from them.
Cecilia Malmstrom, the foreign European Commissioner for Trade, told that she offered fresh proposals to the United States on civilian manufacturing of civilian aircraft. Moreover, in another statement, she also said that if the Dispute Settlement Body were to approve the countermeasures, as similar to today’s case, any decision of the United States to move forward with them would counter-productive and short-sighted.
Airbus claims that it is now completely compliant with former rulings of WTO, and said that it expects another panel of WTO to approve that compliance finishes before the year-end. Bruno Le Maire, the Finance Minister of France, warned last week that if tariffs of the United States take effect on Friday, then Europe will have no choice to take countermeasures. The chief economist at the private bank Barenberg of Germany, Holger Schmieding, said in his Monday research note that the risk of the trade conflict of the United States with the European Union continues to escalate more. Under the definitions of the WTO, the ruling of the arbitrators on Airbus is not a penalty; however, it is a remedy.
Whereas the United States was planning to slap more controversial and separate penalties during the next month on auto manufacturers of Europe because it thinks that they represent a threat to the national security of the United States.
Findings of the Investigation of the U.S. Commerce Department and sanctions on EU
The findings of the investigation of the United States Commerce Department had open up the way for the U.S. to target the car imports of the European Union countries; however, Trump planned to give more time for negotiations in March between two sides. The ongoing trade dispute of the U.S. with China took the central stage since then, and therefore little progress has done between the Trade Representative’s office of the U.S. and the European Commission, the executive branch of the EU that manages the international trading arrangements of the bloc.
Next year, at some point, the WTO arbitrators expected to rule against Boeing, and tax concessions of the U.S. that made it tough for Airbus to compete with sales of Boeing aircraft. Furthermore, the level of ruling’s countermeasures allowable might equivalent or even beat those settled this October to the United States. And officials of European say that it is what makes the impositions of the tariffs of the United States ahead of that Boeing ruling unreasonable. However, experts claim that Trump is just following a well-trodden way; any administration of the United States would receive the same advantage of the situation.
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