EU and US agree 5-year ceasefire on Airbus-Boeing

Brussels and Washington on Tuesday struck a five-year ceasefire to their 17 year-long trade war over subsidies for the plane makers Airbus and Boeing, several officials told POLITICO.

The deal will be announced at a summit with Commission President Ursula von der Leyen, U.S. President Joe Biden and their trade chiefs later on Tuesday.

According to an EU official, a senior European government official and another person briefed on the details of the agreement, the peace deal will not be permanent — which had been the original goal of frenetic negotiations — but will remove the risk of retaliatory tariffs for five years.

Much of the discussion over the past weeks centered on subsidy transparency and on whether France, Germany and Spain should be allowed to continue granting Airbus “repayable launch investments” — effectively credits to develop new airplane models, under which Airbus pays back more or less money, depending how successful the new model is.

Until now, France, Germany, the U.K. and Spain have not published details of contracts under which they grant Airbus “repayable launch investments.” But they argue that Washington also grants indirect aid to Boeing under secret defense contracts.

Under the truce, the U.S. and EU also agreed on a set of principles to avoid over-subsidization of their rival aircraft giants.

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