U.S. says EU has no legal basis to impose tariffs in aircraft dispute

In this news, we discuss the U.S. says EU has no legal basis to impose tariffs in aircraft dispute.

WASHINGTON (Reuters) – The U.S. government on Tuesday threatened to respond if the European Union imposed tariffs on U.S. imports cleared by the World Trade Organization, arguing the underlying violation involved tax relief from the State abrogated in April.

In a statement, US Trade Representative Robert Lighthizer said any EU action to impose tariffs on $ 4 billion of Boeing Co BA.N planes and other goods would “clearly be contrary to WTO principles and would force the United States to react ”.

Lighthizer said Washington will step up negotiations with Brussels to restore fair competition and resolve the dispute.

He said the WTO arbitrator’s ruling did not allow the EU to retaliate against research and development subsidies given to Boeing, and only focused on tax breaks granted by the Washington State.

“Because Washington state repealed this tax break earlier this year, the EU has no valid basis for retaliation against American products,” he said.

Under WTO rules, a WTO member can only apply authorized countermeasures until the illegal measure, or the harm resulting from that measure, has been eliminated, which has already happened. in this dispute, Lighthizer said.

The WTO arbitrator ignored Washington state’s repeal of the offending tax provision, limiting its review to the impact from 2012 to 2015.

EU officials argue that the same is true of US tariffs imposed on subsidies to the Airbus AIR.PA A380, which is being withdrawn from production.

The USTR said Washington continues to impose tariffs on EU products due to the EU’s failure to withdraw billions of euros in illegal launch aid subsidies for the programs. Airbus A380 and A350, but noted that it had “exercised restraint” in not imposing the full amount of countermeasures authorized.

Reporting by Andrea Shalal and David Lawder in Washington, additional reporting by Tim Hepher in Paris; Edited by David Gregorio

Original © Thomson Reuters

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