Monday 29 June 2020 6:30 pm

Exclusive: UK unhappy with treatment from EU in Airbus-Boeing dispute

Trade secretary Liz Truss has complained to the EU Commission that the UK is being unfairly represented by Brussels in a long-running trade dispute between Boeing and Airbus.

EU sources told City A.M. that Truss set up meetings with high-level figures from the Commission to complain that the other three European countries involved in the dispute – France, Germany and Spain – were getting preferential treatment from the EU in the wake of Brexit.

Read more: Michael Gove ‘concerned’ at how few UK businesses have made Brexit preparations

The World Trade Organisation (WTO) ruled last year that Airbus’ four countries of operation – the UK, France, Germany and Spain – had given unfair subsidies to the European aerospace manufacturer in breach of the trade organisation’s rules.

It was the latest chapter in a 16-year dispute involving the EU countries and the US over the world’s two largest aerospace manufacturers Boeing and Airbus.

In response, the WTO said new tariffs could be slapped on some European goods exported to the US as Boeing, based in Seattle, suffered from a competitive disadvantage.

It led to the US imposing punitive tariffs on $7.5bn (£6.1bn) of EU goods, such as Scottish whiskey, French wine and Airbus aircraft.

The UK is still being represented by the EU during the post-Brexit transition period in regards to the Boeing-Airbus dispute.

Before the Open newsletter: Start your day with the City View podcast and key market data

A Brussels official said Truss complained to the Commission that the UK was not being fairly represented by the EU’s delegation to the WTO, and that their submissions concerning the dispute were not given equal weight compared to the other three EU countries.

The official told City A.M. that the UK’s attitude was “schizophrenic” as they were asking for the EU to treat them fairly in this case, while also threatening to leave the post-Brexit transition period on a no-deal basis.

David Henig, trade expert and UK director of the European Centre For International Political Economy, said it would “not surprise me at all if we’re not getting the full treatment from the EU”.

When approached, the Department for International Trade did not deny Truss’ alleged dissatisfaction with the EU’s handling of the case.

Truss said at Westminster’s trade committee last week that she had recently spoken to EU trade commissioner Phil Hogan about the Boeing-Airbus dispute.

“I’ve been speaking to Phil Hogan, the EU trade commissioner, and Bob Lighthizer, the US trade representative, to get an early resolution to this dispute between Boeing and Airbus, because these tit-for-tat tariffs aren’t helping anybody,” she said.

“All this is doing is damaging the competitiveness of both Boeing and Airbus.

“I’ve had a few calls in the last month talking to both of the leads on this, because while we’re still in the transition period the EU lead the negotiations on this, to urge an urgent settlement and to get Boeing and Airbus to the table to sort this out.”

The bitter dispute between Boeing and Airbus began in 2004, with the WTO since ruling that both companies had received unfair subsidies from their host countries.

Read more: Airbus boss warns production set to fall 40 per cent over next two years

The WTO launched an investigation into both companies in 2005, with tariffs being handed down to Airbus host countries last year after more than a decade of non-compliance.

The EU Commission were contacted for comment.

Share: