On June 15, 2021, Unites States Trade Representative Katherine Tai and European Commission Executive Vice President Valdis Dombrovskis announced an outline to resolve the 20 year old large civil aircraft dispute and suspend tariffs on $115 billion in related products for a period of five years. The announcement follows President Biden’s first in person meetings with European Commission President Ursula von der Leyen and European Council President Charles Michel and in the context of warming trade relations with the EU.  Additionally, Ways & Means Committee Chairman Richard Neal (D-MA) and Ranking Member Kevin Brady (R-TX) have issued positive statement on the agreement.

The below general principles, which is outlined by USTR’s press release, will be the general guide for cooperation between the United States and the European Union:

  1. The two sides will establish a Working Group on large civil aircraft, to be led by each side’s respective Minister responsible for trade.  The Trade Ministers will consult at least yearly.  The Working Group will meet on request or at least every 6 months.

 

  1. The Working Group will seek to analyze and overcome any disagreements that may arise between the sides.  The Working Group will collaborate on and continue discussing and developing these principles and appropriate actions.

 

  1. Each side intends to provide any financing to its LCA producer for the production or development of large civil aircraft on market terms.

 

  1. Each side intends to provide any funding for research and development (R&D) for large civil aircraft to its LCA producer through an open and transparent process and intends to make the results of fully government funded R&D widely available, to the extent permitted by law.  Each side intends not to provide R&D funding or other support that is specific, to its LCA producer in a way that would cause negative effects to the other side.

 

  1. The two sides will continue discussions to further operationalize paragraphs 3 and 4, which apply to all levels of government.

 

  1. Each side intends to collaborate on jointly analyzing and addressing non-market practices of third parties that may harm their respective large civil aircraft industries.  The two sides will implement the annexed understanding on cooperation on non-market economies through the Working Group.

 

  1. Each side intends to suspend application of its countermeasures for a period of 5 years, in the expectation that the other side will contribute to establishing a level playing field and to addressing shared challenges from non-market economies.

 

  1. The two sides will continue to confer on addressing outstanding support measures.

The full press release is available here.

The full framework text is available here.