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.

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Photo of John Brew John Brew

John Brew is the co-chair of Crowell & Moring’s International Trade Group and a partner in the firm’s Washington, D.C. office. He has extensive experience in import and export trade regulation, and he regularly advises corporations, trade associations, foreign governments, and non-governmental organizations…

John Brew is the co-chair of Crowell & Moring’s International Trade Group and a partner in the firm’s Washington, D.C. office. He has extensive experience in import and export trade regulation, and he regularly advises corporations, trade associations, foreign governments, and non-governmental organizations on matters involving customs administration, enforcement, compliance, litigation, legislation and policy.

John represents clients in proceedings at the administrative and judicial levels, as well as before Congress and the international bureaucracies that handle customs and trade matters. He advises clients on all substantive import regulatory issues handled by U.S. Customs and Border Protection and Immigration and Customs Enforcement, such as classification, valuation, origin, marking, tariff preference programs, other agency regulations, admissibility, import restrictions, quotas, drawback, audits, prior disclosures, penalties, investigations, Importer Self Assessment and Customs-Trade Partnership Against Terrorism programs, importations under bond, the Jones Act, vessel repairs, and foreign trade zone matters.

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Photo of Frances P. Hadfield Frances P. Hadfield

Frances P. Hadfield is a counsel in Crowell & Moring’s International Trade Group in the firm’s New York office. Her practice focuses on forced labor and withhold release orders (WRO), import regulatory compliance, and customs litigation. She regularly advises corporations on matters involving…

Frances P. Hadfield is a counsel in Crowell & Moring’s International Trade Group in the firm’s New York office. Her practice focuses on forced labor and withhold release orders (WRO), import regulatory compliance, and customs litigation. She regularly advises corporations on matters involving customs compliance, audits, customs enforcement, as well as import penalties.

Frances represents clients before the U.S. Court of International Trade and the U.S. Court of Appeals for the Federal Circuit, as well as in proceedings at the administrative level. She advises corporations on both substantive federal and state regulatory issues that involve U.S. Customs and Border Protection, the Federal Trade Commission, Food and Drug Administration, and U.S. Fish & Wildlife in matters pertaining to product admissibility, audits, classification, import restrictions, investigations, marking, licenses, origin, penalties, and tariff preference programs.

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