spiritsNEWS March 2021

EU-US tariffs: full, permanent return to tariff-free transatlantic spirits trade needed to boost jobs, growth & recovery

On 5 March, the European Commission announced the EU had agreed with the US a four-month suspension of tariffs related to the ongoing large civilian aircraft dispute. This was very good news for spirits and many other “unrelated” sectors which have been subject to additional duties by the US in most cases since October 2019, and whose exports have suffered dramatically as a result, amidst a very difficult market situation marked by the COVID crisis. We thank the Commission and member states for securing this suspension which has brought hope to our sector. We hope that both the EU and the US will now be able to find a final and permanent resolution to the Airbus-Boeing dispute, so that these unwanted tariffs do not reappear further down the line.

Tariffs on “unrelated” sectors such as ours are never the answer: they only fuel a negative cycle, with a strong risk of further escalation, and generates no tangible benefits to the EU or the US. These messages were supported by 72 US and European associations representing sectors targeted by additional tariffs in January 2021, together with a strong plea to remove additional tariffs on ‘unrelated’ products as soon as possible. While the recent suspension agreed in the Airbus-Boeing context is a very welcome first step in the right direction, we need to ensure that it becomes permanent and that other disputes, in particular the ongoing steel & aluminium dispute, are brought to bed rapidly. This is needed more than ever considering the difficult economic context we all face, as a result of the global pandemic.

With the next deadline of 1 June in the steel and aluminium dispute fast approaching – when current EU tariffs on US whisky imports could double – it is of utmost importance that both sides resolve this dispute which hurts US whiskey exports to the EU and UK. As in the case of the Airbus-Boeing dispute, we are asking for a suspension of these tariffs on both sides, while negotiations on a mutually satisfactory solution on steel and aluminium could take place, or at the very least, for a freeze of the current duty rate.

Now more than ever, as both sides embark on a new and closer phase in their relationship, signs of hope and goodwill need to be encouraged. There is a strong will to resolve this dispute on both sides of the Atlantic, and preventing any escalation, such as the doubling, would support ongoing efforts to help resolve the dispute… with the hope that, soon, we will be able to return to the largely tariff-free arrangements for transatlantic trade in spirits which we enjoyed for almost 25 years.

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