September 4, 2019 / 12:43 PM / 3 months ago

U.S. hopes for decision from WTO on aircraft subsidy tariffs soon

WASHINGTON (Reuters) - The United States hopes to see a decision from the WTO in the next week or two about the level of tariffs Washington may impose after winning a case about European subsidies to Airbus, the U.S. ambassador to Brussels said Wednesday.

FILE PHOTO: A logo is pictured outside the World Trade Organization (WTO) headquarters next to a red traffic light in Geneva, Switzerland, October 2, 2018. REUTERS/Denis Balibouse

Ambassador Gordon Sondland said the two sides could still reach an agreement to settle a pair of 15-year-old legal cases over subsidies for aircraft development, but Washington hoped to recover damages caused to U.S. industry by the illegal EU launch aid for Airbus.

Brussels is pressing Washington to skip tariffs since the EU has also won a WTO judgment against U.S. aid to Boeing and expects a WTO decision on allowable tariffs in several months. But Sondland said previous informal conversations with the EU about a settlement had “really gone nowhere.”

Asked if Washington would impose the tariffs regardless of any settlement talks with Brussels, he said the decision was up to U.S. President Donald Trump.

“We want them to stop the launch aid,” he said. “The launch aid damages are being computed by the WTO, and once we know what those damages are our hope is to recover them through the normal mechanisms.”

Washington has asked the Geneva body for approval to impose $11.2 billion of tariffs due to European subsidies for Airbus, but the WTO is likely to award a lower level of damages.

The United States has published a list of $25 billion worth of EU goods ranging from aircraft parts to Italian cheeses that are eligible to be hit with tariffs as a result of the case.

The WTO has found that both Airbus and Boeing, the world’s two largest planemakers, received billions of dollars of harmful subsidies in a pair of cases marking the world’s largest-ever corporate trade dispute.

The United States and EU have each threatened to impose billions of dollars of tit-for-tat tariffs, but Washington is first in line to seek tariffs under the WTO timetable.

Washington in June signaled its openness to working on an enforceable mechanism to govern subsidies for aircraft production, potentially resolving the dispute which has taken up thousands of pages of rulings.

But informal talks have failed to produce any substantial progress, and EU diplomats say they are bracing for Washington to impose the full range of tariffs allowed by the WTO once the body’s arbitrator rules.

“The process is we get the number and then the president, with the advice of the U.S. trade representative, decides what the appropriate level of ... tariffs (is) ... if any,” Sondland said. “That’s completely up to the president.”

Reporting by Andrea Shalal; Editing by Andrea Ricci

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