By way of a brief background, on 6 October 2004 the United States requested consultations, in line with WTO procedures, with the governments of Germany, France, the UK and Spain, and with the European Commission, concerning measures affecting trade in large civil aircraft. The US concern was that Airbus were receiving non-WTO compliant subsidies from these Member States regarding the production of its civilian aircraft and that these subsidies were damaging to a direct competitor, US aircraft manufacturing firm Boeing. In parallel, on 27 June 2005, the EU made its own request to the WTO for consultations citing Boeing’s receipt of non-compliant subsidies from both federal and state level authorities in the US.
On 15 May 2018 the WTO Appellate Body found in favour of the US/Boeing - that Airbus were receiving non-WTO-compliant subsidies from EU Member States. Subsequently, a WTO arbitrator evaluated the claim and reported on 2 October 2019 that the value of countermeasures that the US can impose commensurate with the adverse effects caused by EU subsidies is $7.496 billion. In the parallel Boeing case, the WTO arbitrator’s report is due for finalisation and publication circa Q2 2020.
On the same day as the WTO Arbitrators' Findings were released, the Office of the United States Trade Representative (USTR) published its final list of products to be targeted with new tariffs. The list has 15 sub-sections with Ireland, along with other EU Member States, included in 9 of these sub-sections. The new tariffs were introduced by the US on 18th October 2019 following the receipt of the procedurally- required "authorisation" from the WTO Dispute Settlement Body (DBS) on 14 October 2019.
In relation to impacts, latest CSO data shows that Ireland recorded goods exports to the US of approximately €39.27 billion in 2018. The US is Ireland’s largest goods export market, accounting for 28% of total goods exports in 2018. For the period January to June 2019, Ireland’s total goods trade with the US was recorded as in the region of €22.2 billion. This was an increase of 14% of the same period in 2018.
For those products that fall under the USTR list, Ireland exported approximately €362m worth of goods to the US in 2018, with the principal exports being:
liqueurs and cordials valued at €168.5m,
butter valued at €156.8m and
cheddar cheese valued at €37.3m.
As of 18th October 2019, exports of these products now attract an additional 25% tariff on entry into the US.
My Department continues to engage with industry and colleagues in the Department of Agriculture, Food and the Marine and our Enterprise Agencies in relation to the implications of these tariffs for Irish business.
Furthermore, as International Trade Policy is a competence of the EU Commission under the EU Treaties, the EU Commission takes the lead on this issue taking into account the views of individual Member States and the collective good of the Union. Therefore, Ireland continues to be engaged with the Commission, both at Ministerial and official levels on these issues. My Department and I continue to engage through the relevant EU fora such as the EU Council of Trade Ministers and the Trade Policy Committee to articulate Ireland’s particular concerns on what is an EU-wide issue. Furthermore, I also had a bilateral meeting with Trade Commissioner-elect Phil Hogan in October where we discussed the WTO Airbus and Boeing cases.
The removal of the additional US tariffs on Irish food products will likely require a negotiated resolution to the both the EU and US aircraft disputes. To this end, the European Commission has made clear that it stands ready to work with the US to negotiate a fair and balanced solution for our respective aircraft industries. I, my Ministerial colleagues and my officials have continuously expressed support for such a negotiated solution and our position remains that the mutual imposition of sanctions will only inflict damage on businesses and citizens on both sides of the Atlantic and harm global trade and the broader aviation industry at a sensitive time.
As recently as this July, the EU shared concrete proposals with the US for a new regime on aircraft subsidies and a way forward on existing compliance obligations on both sides, to avoid any further escalation of tariffs. So far, this has not led to a satisfactory outcome. Nonetheless, Ireland’s preference, as I and my Government colleagues as well as my officials have articulated, along with the EU, is for a negotiated settlement to be reached on these issues and we look forward to EU-US engagement to that end.
The Government has highlighted our concerns in bilateral engagements with US interlocuters in Dublin and Washington, intensively over recent months. The issue of the tariffs was also raised during the US Presidential and Vice-Presidential visits this year. I and my officials, as well as colleagues in the Department of Foreign Affairs & Trade and Agriculture, Food & the Marine, continue in contact with our US counterparts in Dublin and Washington on these issues. In addition to raising this matter with my fellow Trade Ministers in Council, I have also recently written to my counterpart, United States Trade Representative, Ambassador Robert Lighthizer to underline Ireland’s disappointment at the tariffs applied on Irish products. I also stressed the negative effect of tariffs on both our farming communities nationwide and those living and working in border areas already affected by the economic uncertainty of Brexit. Finally, I reiterated Ireland’s support for a negotiated resolution to both the Airbus and Boeing disputes. Ambassador Lighthizer, in his reply to me, did not offer any early relief.
I and my officials, as well as colleagues in the Department of Foreign Affairs & Trade and Agriculture, Food & the Marine, continue to monitor the situation and remain in contact with our US counterparts in Dublin and Washington. We are also actively engaged with the EU Commission as it seeks to negotiate a resolution on these and other trade matters with the US.