“Support food producers penalized by Airbus ruling,” MEPs urge

29 Nov 2019 --- Hard-hit agricultural sectors urgently need a package of support measures to mitigate the negative impacts of US tariffs and the long-standing Airbus/Boeing dispute. The EU must act swiftly to help EU farmers unduly affected by newly imposed US tariffs worth €6.8 billion (US$7.5 billion), the European Parliament (EP) said yesterday.

The Members of the European Parliament (MEPs) expressed their “deep concerns” over the collateral damage borne by EU agriculture and food sector due to a dispute in an unrelated sector. They deplore the US decision to impose increased duties on so many agricultural products. 

The EU products most affected are those with a high added value and which are often protected under EU quality schemes, such as wines and spirits, olive oil and dairy products. Others include table olives, pork meat, coffee, sweet biscuits, processed fruit, citrus, mussels and liquors, notes the adopted text.

They also criticize the US’s lacking interest to work with the EU on resolving the long-standing Airbus/Boeing dispute.

The MEPs stress that the EU must respond to new US tariffs in “a coordinated and unified way.” Initially, the EU Commission (EC)should closely monitor the market, use all existing tools, such as private storage, market withdrawals and instruments to deal with market disturbances, while also mobilizing rapid support for the sectors worst affected.

The EU’s executive should step up efforts to promote EU agricultural products abroad and make promotion-related funding rules more flexible to allow for EU campaigns in the US to be boosted or redirect them on alternative markets, the MEPs say.

To help diversify EU export markets, all barriers that prevent exporters from fully using opportunities under EU trade agreements should be removed, MEPs insist. They reject any cuts to the EU’s farm policy budget and call for its crisis reserve to be reformed.

Parliament also urges the EC to find a negotiated solution to ease EU-US trade tensions.

Collateral damage in a trade spat 
A World Trade Organisation (WTO) ruling on Airbus subsidies gave the US the right to levy tariffs on EU exports as retaliation for earlier, excessive EU subsidies given to the aircraft maker Airbus. The US levied up to 25 percent tariffs since October 18, 2019, on a large number of agricultural products such as French wine, Italian cheese and Spanish olive oil.

The EU won a parallel case brought against US aircraft maker Boeing and the WTO ruling on the level of tariffs with which the EU can retaliate is expected in 2020.

The EU Member States most affected by the WTO authorized tariffs are the UK, France, Spain, Italy, Germany and Ireland: they bear around 95 percent of the tariffs hitting farm exports worth €3.5 billion (US$3.8 billion), Trade Commissioner Cecilia Malmström told MEPs earlier this week. 

The US is the number one destination of EU agricultural exports. In 2018, these exports reached €22.3 billion (US$24.5 billion).

In October, the repercussions of the EU-US trade conflict as a result of the Airbus dispute were slammed by the European Dairy Association (EDA) as “collateral damage of an airborne fight.” Under the new levied tariffs on European fine cheeses and other goods, sector players underscore significant losses for consumers. FoodIngredientsFirst spoke to representatives of the European dairy sector, who outlined that there may be more losers than winners in this ongoing dispute.

By Gaynor Selby

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