Progress on Large Civil Aircraft Disputes

Monday 21st June 2021 Written Statements

[The Secretary of State for International Trade (Elizabeth Truss)]

On Thursday 17 June I struck a historic deal with the US on the Airbus-Boeing disputes in a major win for both the aerospace sector and for industries such as Scotch whisky.

After talks with US Trade Representative Katherine Tai, both sides have agreed to suspend retaliatory tariffs for five years and co-operate more closely on tackling unfair trade practices by non-market economies.

These 17-year disputes, the longest-running in the history of the World Trade Organisation, have seen damaging retaliatory tariffs levied on products on both sides of the Atlantic due to disagreements over support for large civil aircraft.

The disagreement has hit industries such as cashmere, machinery and single malt Scotch whisky that employ tens of thousands of people across the UK. The Scotch Whisky Association estimates the tariffs have cost the sector hundreds of millions of pounds in lost revenue.

The UK, which was involved as a member of the EU, took the decision to deescalate these disputes by unilaterally suspending retaliatory tariffs on the US at the start of this year, which encouraged the US to agree to a four-month suspension of tariffs while both sides negotiated a longer-term arrangement.

The UK and US will now work together to put the agreement into practice and strengthen co-operation in the large civil aircraft sector.

This deal marks our joint intention for the UK and US to:

Not impose countermeasures for five years.

Establish a working group on large civil aircraft that is led by the respective Minister responsible for trade.

Provide financing to a large civil aircraft producer for the production or development of large civil aircraft on market terms.

Provide research and development funding for large civil aircraft: through an open and transparent process; making the results widely available; and not providing research and development funding, or other support, to producers of large civil aircraft in a way that would cause negative effects to the other side.

Collaborate on tackling non-market practices of third countries that may impact on their large civil aircraft industries.

[HCWS104]