On The Hill

Trade Update (March 17)

Mar 17, 2020 | SHARE  
Washington State Lawmakers Repeal Boeing Tax Break
On Thursday (Mar. 12), the Washington State Senate approved a bill eliminating a tax break for Boeing that has been ruled illegal by the World Trade Organization (WTO), stemming from the Boeing-Airbus dispute. Governor Jay Inslee (D) is expected to sign the legislation.
“Today’s repeal by Washington state of its aerospace business and occupation tax rate brings the United States into full WTO compliance by fixing the single [remaining] finding against the U.S., further emphasizing our commitment to free and fair trade,” Boeing said in a statement.
The U.S. has already received the WTO’s permission to impose duties on $7.5 billion worth of EU goods after a compliance panel found four European governments had not completely eliminated their illegal subsidy program for Airbus. Despite that WTO ruling, the EU contends it’s moving toward compliance. There was no immediate reaction to the Washington state action from EU officials, who have been awaiting a decision from the WTO on the amount of retaliatory duties it can impose on the U.S. for failing to completely comply with previous rulings in the aerospace subsidy dispute. Next week, the United States is scheduled to increase a 10 percent retaliatory tariff on European aircraft to 15 percent to put more pressure on the EU. Still, the U.S. decided against increasing a 25 percent retaliatory tariff on European wines, whiskey, cheese and many other products.[2]
Coronavirus Halts U.S.-UK Trade Talks?
Trade talks between the U.K. and the U.S. could be put on hold because of coronavirus, the British government said. The Department for International Trade said discussions were still due to begin at the end of March but added that the plans could change.[3]
“We have published our negotiation objectives for the U.K.-U.S. free-trade agreement and talks are due to begin at the end of this month,” a spokesperson said. “Of course, we will keep the situation under review and will be guided by scientific advice.”
EU Trade Chief Cancels North America Visit
EU Trade Commissioner Phil Hogan postponed his scheduled visit to North America next week over fears of the coronavirus.
“The trip has been canceled and will be rescheduled as soon as possible,” Daniel Rosario, a spokesperson for Hogan, said in an email. “If necessary, contacts will continue through other means.” Hogan has been meeting with USTR Robert Lighthizer on a mini trade deal to resolve various trade and agriculture disputes. It is unclear when they and their teams will meet next.
[1] Ferris, Sarah, Cheney, Kyle, & Breshnahan, John “Pelosi and Mnuchin near deal on massive coronavirus relief package” Politico Pro, 13 Mar. 2020
[2] Palmer, Doug. “Washington state lawmakers repeal WTO-contested tax break for Boeing.” Politico Pro. 12 Mar. 2020. https://subscriber.politicopro.com/article/2020/03/washington-state-lawmakers-repeal-wto-contested-tax-break-for-boeing-3977742
[3] Casalicchio, Emilio. “U.S.-U.K. trade talks at risk from coronavirus.” Politico Pro. 12 Mar. 2020. https://subscriber.politicopro.com/article/2020/03/us-uk-trade-talks-at-risk-from-coronavirus-3977738


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