After all, wine warms the heart!

By LightHouse LHLF

Opening a path of negotiation toward more tariff-free transatlantic trade

In the famous transatlantic dispute dating back to 2004 linked to the fierce competition between AirBus and Boeing, the State-parties concerned (notably France, the European Union and the United States) accused each other of illegally providing subsidies to these two airline manufacturers. After bringing the dispute to the WTO and its dispute settlement mechanism, the parties were authorized to adopt a number of trade measures and countermeasures.

In October 2019, the WTO assessed the damage suffered by the United States at $7.5 billion and authorized an American countermeasure to impose a surtax on certain products, including French wines at 25% of their value upon entry into the United States. For its part, the European Union obtained authorization from the WTO in October 2020 to impose additional tariffs in the amount of 4 billion dollars.

Both sides have suffered from these measures, as the surtaxes fall on the consumers. In fact, importers pay the additional duties and are therefore forced to adjust prices. French wine producers were also forced to adjust their prices and potentially lost significant market share, as wines from Italy or Australia for instance were not subject to the surtaxes. As specialists in European customs law, we assist numerous importers and exporters in these matters.

However, the new American administration​ of Joe Biden, is not following the policy initiated by the « Tariff Man » and has committed itself to a path of negotiation with the European Union by signing an agreement on March 4, 2021 to suspend the measures adopted by both sides (including the surtaxes) for a period of four months from March 10, 2021. This gesture of goodwill should allow for a peaceful negotiation to settlet  this already over 16-year-old dispute. Other measures may potentially be suspended in the coming months and we remain at your disposal to assist you on these issues, if necessary. Do not hesitate to contact us (or to invite us for a drink!)Cheers!