French President Emmanual Macron speaks on the telephone with U.S. President-elect Joe Biden, at the Elysee Palace in Paris, France November 10, 2020.
Ian Langsdon | Reuters
French President Emmanuel Macron suggested to President Joe Biden two weeks ago that the countries seek a negotiated settlement in the Boeing-Airbus conflict over aircraft manufacturing that has lasted nearly two decades, according to a person familiar with the matter.
Biden, according to the person familiar with the call, said the relevant teams would follow up but was noncommittal on the outcome. Efforts to reach a resolution have been under way for some time.
Neither country’s official readout of the call included a mention of the long-simmering trade dispute that spans back to Biden’s days serving as a senator and chairing the Foreign Relations Committee.
“Airbus supports all necessary actions to create a level-playing field and continues to support the EU’s commitment to finding a negotiated settlement of this long-standing dispute to avoid lose-lose tariffs,” Airbus said in an e-mailed statement.
The White House and Office of the U.S. Trade Representative could not be reached for comment before publication. A representative for Boeing didn’t immediately respond to requests for comment.
Since 2004, Boeing and Airbus have been embroiled in a legal battle over what each side sees as unfair tax subsidies provided by Washington state and the European Union.
The World Trade Organization has ruled favorably for each side at different stages, issuing orders for the United States and European Union to offset their rival’s benefit by levying tariffs on a total $11.5 billion in goods. Each side has since moved to roll back the tax subsidies at the heard of the dispute.
“There’s really nothing left but to reach a deal,” said Marjorie Chorlins, senior vice president of European Affairs at the U.S. Chamber of Commerce. “The last administration made a good faith effort to resolve these issues but didn’t close the deal.”
Beyond that, the pandemic has soured demand for air travel and, by extension, purchases of large civil aircraft – further exacerbating the impact on two manufacturers that have incurred hundreds of millions of dollars in legal fees since the dispute began.
The floating of a potential settlement by Macron signals how high a priority it is for France and the EU as they eye a reset of transatlantic relations under the new administration.
“Our aim is to find solutions to our ongoing trade disputes, including on Airbus/Boeing,” said Sophie Dirven, a spokesperson for the European Commission.
Biden, likewise, has pushed to reset diplomatic relationships with allies following the contentious Trump years.
The decision of whether to move forward with a settlement would land on the plate of the USTR, which had previously enacted tariffs on $7.5 billion in European goods, including German machinery, Italian cheese and French wines.
In recent days, the Office of the U.S. Trade Representative has announced a slate of staff appointments as it awaits a confirmation hearing for USTR nominee Katherine Tai, expected to take place the week of Feb. 22 at the earliest.
Officials have raised the issue with other Cabinet members who have been confirmed.
In a Jan. 28 phone call between Treasury Secretary Janet Yellen and French Finance Minister Bruno Le Maire, Le Maire “insisted in particular on the very penalizing nature of the sanctions for French winegrowers,” according to the readout from Paris.
– CNBC’s Leslie Josephs contributed to this report.
