On 6 October 2004 the United States requested consultations, in line with WTO procedures, with the governments of Germany, France, the United Kingdom, and Spain, and with the European Commission concerning measures affecting trade in large civil aircraft. The US concern was that Airbus were receiving unfair 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 unfair 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 unfair subsidies from EU Member States. Subsequently, a WTO arbitrator evaluated the claim and reported on the 2 October 2019 that the value of countermeasures that the US can impose commensurate with the adverse affects caused by EU subsidies is $7.496 billion. In the parallel Boeing case, the WTO arbitrators’ report is due for finalisation and publication in 6-9 months’ time – 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 that will 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 can be introduced once the US obtains "authorisation" from the WTO Dispute Settlement Body (DBS) at the next scheduled DSB meeting and my Department understands that a special sitting of the DSB has been arranged for 14 October 2019 to fulfil this procedural requirement.
The 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 those products effected by 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.
Exports of these products will attract an additional 25% tariff on entry into the US.
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, we continue to be engaged with the Commission, both at a Ministerial and Official level on these issues. For example, at the Informal Trade Council in Brussels on 1 October 2019, in discussing the Airbus case, I placed particular stress on the impacts the imposition of tariff measures by the US could have for both the global and Irish economy. I was also keen to highlight how EU and US trade had developed over the decades in a spirit of openness and mutual gain such that imposing tariff measures on one another, as had already arisen in relation to steel and aluminium, and was now in looming in the context of the Airbus and Boeing cases, would be damaging to both economies. Furthermore, I also argued that Ireland had clearly shown how a two-way flow of trade and investment means jobs growth in both economies. I, therefore, urged the EU Commission to continue to work with our US colleagues on a range of current trade challenges, given the strong role both the US and the EU play on the global trading stage, to achieve a mutually beneficial outcome for our citizens.
I also emphasised to fellow EU Trade Ministers that it is only with a continued, clear and united, approach that we can hope to successfully engage with current US trade policies. I reiterated Ireland’s strong support for pursuing all available avenues to reach a negotiated settlement with the United States, which the EU Commission and Member States support.
In addition, I held a bilateral meeting with Trade Commissioner-elect Phil Hogan in Brussels on the same day and we discussed a number of trade matters with particular focus on the WTO Airbus and Boeing cases. I raised the potential impact the imposition of tariffs, as per the US tariff list, could have on Ireland.
I can assure the Deputy that I and my Department continue to actively engage with US interlocuters to highlight Irish concerns as to the impact of tariffs, particularly on the Irish agri-food sector, given the potential impacts that may simultaneously arise for the sector and our border communities from Brexit. My Department has also engaged with colleagues in the Department of Agriculture, Food and the Marine, as well as industry (IBEC & Sector Groups, ISME) and our Enterprise Agencies in relation to the USTR proposed list of tariffs.
In addition, my Department has highlighted our concerns at EU level as well as in appropriate bilateral engagements with US interlocuters in Dublin and Washington. Specifically, these issues were raised by our Ambassador in Washington with a number of political figures. Finally, senior officials from my Department raised our concerns during a series of bilateral meetings with a number of US officials during a visit to Washington in June.
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. Ireland does not want to see this escalation at this time and we strongly support pursuing all available avenues to reach a negotiated settlement.