Jet subsidies battle ‘terrible’ for trade, warns TABD boss

By Anna McLauchlin

EU and US leaders must resolve the Airbus-Boeing subsidy dispute before it reaches the World Trade Organization (WTO) or risk seriously damaging transatlantic relations, the head of the TransAtlantic Business Dialogue (TABD) Niall FitzGerald warns. There is still time to avoid a conflict after the EU and US launched parallel multimillion euro cases with the WTO on 7 October, he says. “I hope wise counsel prevails in the 30 days that they have and that it doesn't become a WTO issue,” he told European Voice.

“That would be hugely complicating and disturbing for the already fragile transatlantic relationship. The WTO cannot handle this, it's too big and too political.”

If it does go to the WTO, he said, the most “terrible” outcome would be action taken against both parties. “Then we'll have a trade war on our hands and nobody in their right mind can want that.”

But while a WTO case would be damaging, FitzGerald insisted that disputes with the US represent less than 5% of the 550 billion euro transatlantic trade flow, which accounts for around a third of global trade.

On Friday (22 October) the TABD, which aims to create a barrier-free transatlantic market, will hold a consultation with governments to discuss proposals put forward by TABD at the EU/US summit in June. The TABD is asking for commitment to the four recommendations it put forward to the governments.

Firstly, it wants to set up a US/EU taskforce including government and industry representatives, to work on promoting common customs procedures and security processes. Secondly, it calls for stiffer penalties and stronger enforcement of anti-counterfeiting and piracy laws to combat intellectual property crime.

Corporate behaviour is the third priority and TABD requests governments to push ahead with convergence of accounting standards and auditor requirements. Lastly, it pushes for “sustained political will” to complete the Doha trade liberalization.

FitzGerald is sanguine about the progress that has been made with governments. “Of course I'd like negotiations to go faster and we're in a fallow period at the moment with elections and the changeover from one Commission to another. But then I expect things to pick up quickly.”

He thinks the TABD's longer-term plan enjoys political support. The idea is to get the EU and US administrations to talk about the impact their legislation will have on both sides of the Atlantic before it becomes law. “We are not saying all legislation on both sides of the Atlantic is going to end up the same,” he said.

“But the point of regulatory cooperation is to get in early so that you can understand the consequences of a piece of legislation rather than waking up to it at the last moment, which is what happened with the chemicals directive, for example.”

The TABD aims to put an action plan in place early next year.

But FitzGerald insisted he would not set a target date for achieving free transatlantic trade. “Enough people should have learned from the experience of Lisbon 2010 to know that once you set a date, that date becomes the issue rather than the substance of what you are trying to do,” he said. “I'm interested in getting things done, not in headlines.”

FitzGerald, who left Unilever to become chairman of Reuters on 1 October, has been EU co-chair of the TABD alongside US counterpart Neville Isdell of Coca-Cola since January.

Interview with the head of the TransAtlantic Business Dialogue (TABD), Niall FitzGerald. FitzGerald warned that EU and US leaders must resolve the Airbus-Boeing subsidy dispute before it reached the World Trade Organization (WTO) or they would risk seriously damaging transatlantic relations,