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The European Union's next chief of trade policy said the United States is not yet 'in a position' to engage on proposals to end aircraft subsidies.
, which are wholly unrelated to the aircraft subsidy complaint against Airbus, could face costly trade barriers as a consequence. "It will have a huge impact across different sectors," says Luisa Santos, director of international relations at Europe's largest business lobbying organization, BusinessEurope.
"It's not going to be positive." The USTR's office did not respond to a CNBC request for comment about its potential response, although back in April U.S. Trade Representative Robert Lighthizer issued a statement saying the U.S. would "respond immediately when the WTO issues its finding."But a remarkably similar WTO arbitration ruling, predicated on the favorable tax treatment and federal research financing that aided Boeing in contravention of WTO rules, is expected to permit the EU to take its own countermeasures against the U.S. in just a few months' time. The only reason that the U.S. would strike now is to put pressure on the EU, and maybe get something out of the EU.That has prompted EU leaders, independent trade experts and European business groups to suggest that a negotiated settlement before then is not only preferable for both sides, but necessary given the global economic slowdown. "I don't think that it's in anybody's interests to start raising tariffs right now," says BusinessEurope's Santos. "The only reason that the U.S. would strike now is to put pressure on the EU, and maybe get something out of the EU." Several trade experts and EU officials say that tariffs stemming from the WTO ruling on Airbus could be used as a cudgel, forcing European negotiators to include agriculture in bilateral trade talks, which have largely stalled in recent months. For many, a positive recent development in the agri-food space that could serve as a model was a July agreement between the two sides on beef. This was, said the European Commission's Hogan, a "clear example" of the EU's willingness to "resolve an issue that's been going on a while but to do so through dialogue and cooperation."
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