US, EU strike Airbus-Boeing deal in the face of China aircraft challenge

·2-min read

US President Joe Biden and the EU officials have agreed a long-term truce in the 17-year-old Airbus-Boeing feud, putting aside their own disputes to take on China which is about to launch its first domestically manufactured airliner.

Negotiated in marathon talks by EU and US officials, the truce was formalised in Biden's summit with European leaders Charles Michel and Ursula von der Leyen, who hosted him in Brussels on Tuesday.

Washington and Brussels will "work together to challenge and counter China's non-market practices in this sector that give China's companies an unfair advantage," Biden said in a statement issued after the talks.

"It's a model we can build on for other challenges posed by China's economic model," he added.

Von der Leyen said the summit had "delivered" as she hailed a "breakthrough" in a feud that became one of the longest in World Trade Organization history.

"This really opens a new chapter in our relationship because we move from litigation to cooperation on aircraft," she added.

Earlier this year Biden and Von der Leyen -- the president of the European Commission -- had suspended retaliatory tariffs in the dispute over subsidies for the rival planemakers. The punitive measures targeted European cheese and wine and American wheat and tobacco, among other products.

In a statement, Boeing said that it "welcomes the agreement," adding that "The understanding reached today commits the EU to addressing launch aid, and leaves in place the necessary rules to ensure that the EU and United States live up to that commitment, without requiring further WTO action. Boeing will fully support the U.S. Government’s efforts to ensure that the principles in this understanding are respected."

Growing Chinese competition

Officials said the truce would last for at least five years, leaving enough time to resolve the fight -- while still factoring in China's growing capability in the aviation industry.

China is expected to put its own commercial aircraft, the Comac C919 single aisle, a potential rival to Boeing’s 737 and Airbus’s A320, into commercial service. While the American and European planes perform better on range and fuel consumption, China’s airlines - controlled by the state - are lining up to with multiple orders to guarantee the aircraft’s success, at the expense of possible orders for Boeing and Airbus.

C919’s manufacturer, the Commercial Aircraft Corporation of China (Comac), was established in Shanghai in 2008 and it took 10 years to develop the plane.

According to the aviation industry platform Airline Geeks, Beijing’s guideline for aviation companies to “buy Chinese” has already resulted in over 800 provisional orders from 28 countries for the C919.

(With agencies)

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