French winemakers celebrate EU-US tariff agreement

The two sides have agreed to a four-month suspension of tariffs imposed due to the long-running Airbus-Boeing dispute, which cost French winemakers €500 million in 2020

7 March 2021
Two wine glasses, cheers. French winemakers celebrate EU-US tariff agreementThe agreement will suspend tariffs - which cost French winemakers €500 million in 2020 alone - for four months as negotiations continue
By Hannah Thompson

French winemakers have welcomed an agreement between the EU and US to suspend punitive tariffs on goods, in the first move towards resolution of the row between aircraft rivals Airbus and Boeing.

The agreement was announced by European Commission president Ursula von der Leyen after she spoke with new US President Joe Biden on the telephone.

Both the EU, including France, and the US will suspend tariffs for four months.

In a statement, Ms von der Leyen said: “We both committed to focus on resolving our aircraft disputes, based on the work of our respective trade representatives.

"This is excellent news for businesses and industries on both sides of the Atlantic, and a very positive signal for our economic cooperation in the years to come."

The move is the first agreement on the issue since President Biden took office, and is expected to facilitate a permanent resolution of the dispute.

‘Excellent news for winemakers’

France has particularly welcomed the move as the punitive US tariffs had especially affected French winemakers.

The French Foreign Trade Minister Franck Riester welcomed the move, and called it “excellent news for our industry and winemakers” and the “first step in the de-escalation process”.

Mr Riester added: “We will now work with the Commission and our European partners over these four months, to find an agreement on new rules around public support for the aeronautical sector, which works for our interests, and is not naive.”

Economy Minister Bruno Le Maire said: “We are finally leaving the commercial war between the US and Europe, which only created losers. I am celebrating for the French winemakers. Let us continue on the path of cooperation to find a definitive agreement.”

In a statement, wine and spirit federation la Fédération française des Exportateurs de Vins et Spiritueux de France (FEVS) said: “This agreement is a relief to all exporters, who have, for 18 months, suffered these unfair taxes due to a conflict that does not involve them.

“[We call] for these four months to be used to find a definitive solution to this never-ending conflict over aeronautics, and to secure our business in the American market.”

Raphaël Delpech, general manager of cognac authority le national interprofessionnel du cognac, told the Agence France-Presse: “[We are expecting] a lot from these four months [but] we feel that our fears have been taken into account and we hope that everything will be done to get out of this absurd situation.”

Jérôme Despey, general secretary of the agricultural union FNSEA, said: "This suspension that we have been asking for months was highly anticipated. Now, within four months, the case must be settled so that the wine industry is no longer hostage to a conflict that has nothing to do with us.”

In a statement, Airbus said: “We welcome USTR’s (US Trade Representative) decision to suspend tariffs for allowing negotiations to take place. 

“Airbus supports all necessary actions to create a level-playing field and continues to support a negotiated settlement of this longstanding dispute to avoid lose-lose tariffs.”

Boeing said: “We commend this action...creating an opportunity for serious negotiations to resolve the WTO aircraft dispute. A negotiated settlement will allow the industry to move forward with a genuinely global level playing field for aviation.”

Airbus and Boeing have been involved in a long-running dispute since 2004, over the subject of public subsidies given to both companies, which have been criticised as illegal.

In 2019, the US - then under former President Trump - imposed taxes of almost $7.5 billion (€6.8 billion) on European goods and services imported each year, as part of the row. This included 25% on wine and spirits, and 15% for Airbus planes.

In retaliation, a year later, Brussels imposed €4 billion-worth of taxes on products imported from the US.

The tariffs are said to have cost the French winemaking industry €500 million in 2020 alone. In January this year, then-President Trump extended the tariffs to French cognac and Armagnac.

A similar agreement has also been reached between the US and UK.

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