On 9 November 2020, the Official Journal published Commission Implementing Regulation (EU) 2020/1646 of 7 November 2020 on commercial policy measures concerning certain products from the United States of America following the adjudication of a trade dispute under the Dispute Settlement Understanding of the World Trade Organization. On 11 April 2019, the Dispute Settlement Body of the World Trade Organization (‘WTO’) adopted its recommendations and rulings in the dispute DS353 United States – Measures Affecting Trade in Large Civil Aircraft (Second complaint) – Recourse to Article 21.5 of the DSU by the European Union, confirming that the United States has failed to bring its measures, found to be inconsistent with the Agreement on Subsidies and Countervailing Measures (‘SCM Agreement’), into conformity with its obligations under that Agreement. With respect to the FSC/ETI tax concessions, the Appellate Body confirmed that the United States has not withdrawn the subsidies and that the original recommendations and rulings remain operative.
On 13 October 2020, an arbitrator’s decision states that the European Union may request authorisation from the WTO Dispute Settlement Body to take countermeasures with respect to the United States, at a level not exceeding USD 3 993 212 564 annually. On 26 October 2020 the European Union has been authorised by the WTO Dispute Settlement Body to take countermeasures against the United States consistent with the arbitrator’s decision. The countermeasures will consist of the suspension of tariff concessions and the imposition of new or increased customs duties.
The measures adopted are considered sufficiently similar to the countermeasures imposed by the United States, and concern imports of products originating in the United States on which the European Union is not substantially dependent for its supply. This approach avoids as much as possible a negative impact on the various actors on the Union market, including consumers.
The commercial policy measures in the form of additional ad valorem duties on the products listed in Annex I and Annex II shall be applied as follows:
(a) additional ad valorem duties of a rate of 15 % for products specified in Annex I to the Regulation;
(b) additional ad valorem duties of a rate of 25 % for products specified in Annex II to the Regulation.
Products listed in the Annexes for which an import licence with an exemption from or a reduction of duty has been issued prior to the date of entry into force of this regulation shall not be subject to additional duty.
Products listed in the Annexes for which the importers can prove that they have been exported from the United States to the Union prior to the date on which an additional duty is applied with respect to that product shall not be subject to the additional duty.
Negotiations between the European Union and the United States aiming at a balanced settlement of the WTO disputes on large civil aircraft have so far not yielded results. The United States continues to apply countermeasures in the amount of USD 7,5 bn on imports of products from the European Union. The Commission intends to amend this Regulation, to take into account relevant developments, including with respect to US compliance or lack thereof. In particular, the Commission intends to suspend the application of the implementing Regulation, if the United States suspends its countermeasures against imports from the European Union, or change the level of customs duties, as necessary, to mirror the countermeasures applied by the United States.