The United States Trade Representative (“USTR”) has published a notice regarding potential revisions to tariffs imposed as a result of the WTO dispute on Airbus subsidies (the “Review of Action”). The notice is here. USTR is requesting comments by January 13, 2020.

BACKGROUND

For over 15 years, the United States and the European Union have been involved in multiple WTO disputes regarding alleged subsidies for commercial aircraft production. In the two main disputes, the United States challenged alleged subsidies provided by the European Union and four EU member states (France, Germany, Spain, and the United Kingdom) in the dispute known as “DS316,” and the European Union challenged alleged subsidies provided by federal and state governments in the United States in the dispute known as “DS353.” The WTO panels and the Appellate Body made findings and recommendations largely favorable to the complainant in each dispute, and they found in 2018 and in March 2019 that neither the United States nor the European Union have brought themselves into full conformity with their WTO obligations regarding subsidies. In response to these rulings of non-compliance on the part of both the United States and the European Union, each party already invoked its right to retaliate against the other under WTO rules, and each party has sought WTO arbitration to determine the level of authorized retaliation.

Earlier this year, USTR published preliminary lists of products—including aircraft and food, beverage, and other products—that could be subject to increased duties when imported from the European Union. These products were the subject of comments, a public hearing, and post-hearing comments, followed by imposition of additional duties on October 18, 2019 on a subset of the products considered.

REVIEW OF ACTION

The notice published by USTR includes two lists of products. Annex I is the list of products currently subject to additional duties. Annex II is a list of products (originally published in April and July 2019) for consideration of additional duties, but for which duties have not yet been imposed. At this point, only products that have previously been the subject of the 30-day notice and comment process are being considered in this Review of Action. No new products are being considered at this time.

USTR seeks comments by January 13, 2019 regarding specific enumerated factors. With respect to Annex I, the notice requests comments on whether specific products of specific EU member states should be removed from the list or should remain on the list, and if a product remains on the list, whether the current rate of additional duty should be increased to as high as 100 percent. With respect to Annex II, the notice requests whether specific products of specific EU member states should be included on a revised list of products subject to additional duties, and the rate of additional duty (as high as 100 percent) that should be imposed.

USTR also is inviting comments on whether maintaining or imposing additional duties on a specific product of one or more specific EU member states would (i) be appropriate to enforce U.S. WTO rights or to obtain elimination of WTO-inconsistent measures or (ii) cause disproportionate economic harm to U.S. interests, including small or medium-size businesses and consumers.