The European Union and the United States agreed on Friday to suspend tariffs imposed on billions of US dollars of imports in a 16-year-old dispute over aircraft subsidies, and said any long-term solution would need to address Chinese competition.
The two sides said in a joint statement that the four-month suspension will cover all US tariffs on US$7.5 billion of EU imports and all EU duties on US$4 billion of US products, which resulted from long-running World Trade Organisation cases over subsidies for planemakers Airbus and Boeing.
It will ease the burden on industry and workers and focus efforts on resolving the conflict, the statement said.
As well as effective support measures and enforcement, key elements of a resolution would include "addressing the trade distortive practices of and challenges posed by new entrants from non-market economies, such as China," it said.
The suspension followed a telephone call between US President Joe Biden and European Commission President Ursula von der Leyen, officials said.
The White House said Biden had underscored his support for the EU and his commitment to revitalise the US-EU partnership, while Von der Leyen described the accord as excellent news for businesses on both sides of the Atlantic, and a very positive signal for economic cooperation in the years to come.
EU trade chief Valdis Dombrovskis hailed a reset in the EU's relationship with its biggest and economically most important partner.
"Removing these tariffs is a win-win for both sides, at a time when the pandemic is hurting our workers and our economies," he said.
The US tariffs cover EU planes and plane parts, wine and jam from France and Germany, Spanish olives, German coffee, screwdrivers and other tools, and liqueurs, cheese and pork from across the EU.
EU tariff targets include US planes and parts, along with tobacco, nuts, sweet potatoes, rum, vodka, gym equipment, casino tables, tractors and machines used in construction known as shovel-loaders.
The suspension will take effect once official notices are published, expected in coming days.
The tariff suspension will help Boeing as the company resumes deliveries of its 737 MAX in Europe after a 22-month safety grounding ended in January. (Reuters)