The European Union (EU) may impose tariffs of up to US$4bn on goods imported from the USA, Olive Oil Times reported from the latest ruling from the World Trade Organization (WTO) on 15 October.
In the WTO’s ruling the USA was found to have illegally subsidised the American aircraft manufacturer Boeing.
The decision followed the WTO’s similar ruling a year ago which allowed the USA to impose tariffs of US$7.5bn on European imports.
In that ruling, the WTO had found the EU had illegally subsidised its own aircraft manufacturer, Airbus. The EU said it had now ended the subsidies.
The goods targeted by the US tariffs included packaged olive oil from Spain as well as some table olives from France and Spain, with all three facing a 25% import duty.
On its part, the EU had identified a number of industrial and agricultural goods as potential tariff targets, Olive Oil Times said.
The WTO’s decisions had brought to an end a 16-year dispute between the USA and the EU over illegal subsidies provided to their respective aircraft manufacturers, Olive Oil Times said.
Trade experts had widely expected the WTO’s announcement saying that this result had been necessary for the two sides to begin negotiations.
For Spanish olive oil producers and French and Spanish table olive producers, the WTO decision could mean the beginning of a process that could ultimately eliminate the tariffs. However, how quickly this could be resolved and with how much certainty was not known, Olive Oil Times said.
“This long-awaited decision allows the European Union to impose tariffs on American products entering Europe,” European trade commissioner Valdis Dombrovskis was quoted as saying.
“I would much prefer not to do so – additional duties are not in the economic interest of either side, particularly as we strive to recover from the COVID-19 recession.”
|t was Dombrovskis’ hope that the US would now drop the tariffs imposed on EU exports last year as this would help both sides find common ground in key areas.
“If it does not happen, we will be forced to exercise our rights and impose similar tariffs,” he added.
The US trade representative Robert Lighthizer was quoted by Olive Oil Times as saying that while they disagreed with certain aspects of the WTO’s decision, it was more important that it had not authorised any retaliation for subsidies other than the Washington state tax break.
“Because Washington state repealed that tax break earlier this year, the EU has no valid basis to retaliate against any US products,” he said.
“Any imposition of tariffs based on a measure that has been eliminated is plainly contrary to WTO principles and will force a US response.”
However, Lighthizer said the USA was determined to resolve the dispute.
“We are waiting for a response from the EU to a recent US proposal and will intensify our ongoing negotiations with the EU to restore fair competition and a level playing field to this sector.”