US and UK Settle Large Civil Aircraft Dispute with ‘Cooperative Framework’

On June 17, 2021, the Office of the United States Trade Representative (USTR) announced an agreement that would remove punitive tariffs implemented by both sides after years of back-and-forth litigation between Large Civil Aircraft giants, Airbus and Boeing.

COOPERATIVE FRAMEWORK FOR LARGE CIVIL AIRCRAFT

Under the new Cooperative Framework For Large Civil Aircraft, the United States and the United Kingdom will work together to resolve any differences in the industry and serves as a model for maintaining fair competition and tackling non-market economic concerns.   To the relief of shippers facing Section 301 penalties, the framework states that no tariffs relating to the dispute would be imposed for the next five years.

7 General Principles of the Cooperative Framework For Large Civil Aircraft

1. The two sides will form a Working Group on Large Civil Aircraft, which will be led by each side’s respective Trade Minister.
   1. The Trade Ministers will meet at least once a year to consult.
   2. The Working Group will convene on demand or every six months at the very least.
2. The Working Group will try to figure out and resolve any differences between the parties, including any existing assistance measures.
3. Each side intends to provide any financing to its large civil aircraft (LCA) producer for the production or development of large civil aircraft on market terms.
4. 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.
   1. No R&D funding, or other support, that is specific, to an LCA producer that would cause negative effects to the other side.
5. The two parties will continue to put points 3 and 4 into practice at all levels of government.
6. Work together to analyze and address third-party non-market practices that could hurt their respective large civil aviation sectors.
7. Each side intends to refrain from imposing countermeasures for a period of five years,beginning on July 4, 2021, in the hopes that the other will help promote fair competition and address shared difficulties posed by non-market economies.

The United States and the United Kingdom also produced an addendum on tackling China and other non-market economies as part of the cooperative framework. To meet the challenge posed by non-market economies more effectively, the parties will look into concrete methods to strengthen their collaboration in these areas.

SOURCE USTR: Cooperative Framework for Large Civil Aircraft

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