Wednesday

6th Jul 2022

EU and US make peace on trade before Russia summit

  • "We move from litigation to cooperation", European Commission president Ursula von der Leyen said (Photo: consilium.europa.eu)

The EU and US have ended their oldest trade war in a show of transatlantic unity one day before US president Joe Biden meets his Russian counterpart.

The 17-year old trade dispute over subsidies for rival aircraft makers Boeing and Airbus had seen billions of euros of punitive tariffs imposed on other products, such as tobacco and spirits.

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But these will now be lifted for a provisional period of five years, while a special trade council will monitor compliance on state aid for the air firms.

The move still left in place tariffs on steel and aluminium, in a separate trade dispute launched by Biden's predecessor, Donald Trump.

But "happily, the US don't think the EU is a national security threat", European Commission president Ursula von der Leyen said, referring to Trump's stated motivation for the metals war.

And suspending EU countermeasures for six months "gave an opportunity" to resolve that feud too, she said.

"This really opens a new chapter in our relationship because we move from litigation to cooperation," she added.

"It's overwhelmingly in the interest of the USA to have a great relationship with Nato and the EU. I have very different views than my predecessor," Biden also said.

"I think we have great opportunities to work closely with the EU as well as Nato and we feel quite good about it," he added.

The two sides also launched a new council to coordinate return to normal transatlantic travel after the pandemic, one on trade and technology, including artificial intelligence, and one on energy and climate.

But they disappointed green campaigners by declining to give a date for ending use of coal.

The EU-US meeting came after a G7 summit in London and a Nato one in Brussels a day earlier.

And the EU summit communiqué repeated concern over Russia and China's increasingly threatening behaviour, while trumpeting the EU and US commitment to shared values.

"When it comes to human rights and human dignity, we are systemic rivals - there's no question," von der Leyen also told press on China.

"The EU-Russia relationship is currently in a negative spiral ... we'd like to turn that into a more predictable relationship and this is what we conveyed to president Biden," she said.

"We [the US and EU] are different, but we are one when it comes to fighting for democracy," she added.

The series of transatlantic meetings ended one day before Biden is to hold his first talks with Russian president Vladimir Putin in Geneva on Wednesday.

Meanwhile, Britain was also hoping to end its aircraft subsidy dispute with the US, which was not covered by the EU deal due to Brexit, in a move expected on Wednesday, when US trade representative Katherine Tai visits London.

"We have been working hard with the US to de-escalate and agree a settlement after making the first move in suspending tariffs," a British official said.

"We look forward to ... achieving a fair and balanced settlement that works for the whole of the UK," the official said.

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