On Heels of Retaliatory Tariffs, Dairy Industry Craves EU Trade Deal
Recently the EU announced $3.99 billion in tariffs on U.S. aircraft and a range of agricultural and industrial goods, including dairy. There are two tiers of tariffs –the first tier is limited to certain types of civilian aircraft at a rate of 15%, and the second tier applies to a range of food, agricultural and industrial goods at a rate of 25%.
This is the latest move in a long line of moves related to a dispute between the U.S. and the EU over the subsidizing of aircraft production, according to Michael Nepveux. The disagreement between these two countries boils down to the EU and the U.S. each claiming that the other’s airplane manufacturer is unfairly subsidized, dating all the way back to 2006, he says.
“The original case alleged that Airbus received billions in illegal subsidies. The EU filed a counter case alleging Boeing received billions in trade distorting subsidies for its research and development projects. As happens in these cases, the WTO found both sides at fault over the years,” he explains. “The back and forth continued until October 2019, when the WTO allowed the U.S. to impose tariffs on up to $7.5 billion in EU goods.”
In response to the tariff announcement, Jim Mulhern, president and CEO of the National Milk Producers Federation, says Europe has “long wielded restrictive and unjustified” trade tactics and urged President-elect Joe Biden to get Europe to the negotiating table.
“As the U.S. works to hold Europe accountable to its WTO obligations, U.S. retaliatory tariffs against EU dairy products continue to play a key role in bringing Europe to the negotiating table and compelling them to fulfill their trade commitments,” Mulhern says. “The EU’s restrictive trade policies that have resulted in a one-way flow of agriculture trade, and in particular dairy trade, to Europe is something that both the current and future administrations need to keep in mind.”
According to Mulhern, one of the most “egregious” trade tactics the EU has used is the misuse of geographical indications (GIs) to keep the U.S. from selling cheeses such as asiago, feta or parmesan.
“We commend USTR’s continued maintenance of GI cheeses on the WTO-authorized list of tariff retaliation as these tariffs help to temporarily level the playing field for U.S. producers,” he says. “It’s time for Europe to not only comply with its WTO obligations, but also make a fundamental change to retire its discriminatory agricultural trade policies once and for all.”
