The U.S. and UK have reached a deal to end a dispute over aircraft subsidies as trade leaders from both countries express new optimism over strengthening trade ties.
The move comes as the two countries continue to work on a potential free trade agreement, talks that U.S. ag groups generally support. While neither country directly mentioned stalled talks for a free-trade agreement, both U.S. Trade Representative Katherine Tai and British International Trade Minister Liz Truss offered up fresh confidence that the new aircraft deal will strengthen the connection between Washington and London.
Tai is heading back to Washington Thursday after a meeting Wednesday with British International Trade Minister Liz Truss.
“Our success this week shows that democracies can deliver results and come together to shape trade policies that lift up workers, people and communities that are often overlooked,” Tai said in a statement early Thursday morning. “This worker-centric approach will guide our efforts to address other U.S. — UK trade issues, and I look forward to working closely with Minister Truss in the months ahead."
In a deal that mirrors one reached earlier this week by the U.S. and European Union, the U.S. and UK both agreed to suspend tariffs tied to aircraft subsidies on both sides of the Atlantic for five years. The UK was part of the EU when both subsidy disputes began more than a decade ago.
The World Trade Organization ruled in 2019 the U.S. had the right to hit EU nations with $7.5 billion in tariffs over Europe’s Airbus subsidies. The WTO ruled in October last year that the EU could hit the U.S. with $4 billion in tariffs to punish the U.S. for subsidizing Boeing.
The U.S., UK and EU all agreed in March to suspend their tariffs for four months in goodwill gestures aimed at bolstering talks to resolve the aircraft suits. At the time, Ag Secretary Tom Vilsack said the moves offered renewed optimism that the U.S. could resume FTA talks with the British and the EU.
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“Maybe it gives us an opportunity to have conversations about trade agreements with both the UK and the EU,” Vilsack said back in March.
The U.S. began talks with the UK in May of last year during the Trump administration, but those talks were put on hold after the election and through the early months of the Biden administration.
There were five rounds of talks last year, but government officials involved in the negotiations told Agri-Pulse that no agreements on controversial agricultural issues were settled during those talks.
U.S. ag groups, lawmakers and negotiators have been insistent that the British agree to allow in U.S. poultry as well as reject EU-style bans on beef and pork from animals that have been treated with growth hormones or ractopamine.
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