EU preparing countermeasures in subsidies dispute with U.S.

The European Union (EU) is preparing countermeasures against the United States after the World Trade Organization (WTO) has confirmed the EU's retaliation rights in reaction to illegal subsidies granted to the U.S. aircraft maker Boeing, the European Commission said on Monday.

The announcement was made after the Dispute Settlement Body of the WTO formally authorised the EU earlier in the day to take such measures.

Now the EU can increase its duties on U.S. exports worth up to 4 billion U.S. dollars, according to the announcement.

European Commission Executive Vice-President for an Economy that Works for People and Commissioner for Trade, Valdis Dombrovskis, said the commission is "currently finalising the process" preparing the measures, in close consultation with EU members.

"As I have made clear all along, our preferred outcome is a negotiated settlement with the U.S. To that end, we continue to engage intensively with our American counterparts," said Dombrovskis, adding that he is in regular contact with U.S. Trade Representative Robert Lighthizer.

But "in the absence of a negotiated outcome, the EU will be ready to take action in line with the WTO ruling," Dombrovskis noted.

In October last year, following a similar WTO decision in a parallel case on Airbus subsidies, Washington started to impose retaliatory duties that affect EU exports worth 7.5 billion dollars, and the duties remained even after European governments took decisions to ensure full compliance with WTO rules and removed the grounds for the U.S. to maintain the tariffs in July this year.