The two sides have been battling since 2004 in parallel cases at the World Trade Organization over subsidies for U.S. planemaker Boeing and European rival Airbus, which each argued exposed the other to unfair competition.
They agreed in March to a four-month suspension of tariffs on $11.5 billion of goods from EU cheese and wine to U.S. tobacco and spirits, which the WTO had sanctioned. Businesses have so far paid over $3.3 billion in duties.
On Tuesday they said they would remove the tariffs for five years, while still working on the overarching agreement on subsidies they had envisaged in March.
"With this agreement, we are grounding the Airbus-Boeing dispute," EU trade chief Valdis Dombrovskis said in a statement during an EU-U.S. summit with U.S. President Joe Biden.
U.S. Trade Representative Katherine Tai said the two sides had agreed to clear statements on what support could be given to large civil aircraft producers. They would also work to counter investments in aircraft by "non-market actors", she said, referring specifically to China.
"We have committed to meaningful cooperation," she said.
The United States and the European Union have agreed to set up a working group on the issue, provide financing on market terms, be transparent on R&D funding, avoid support that would harm the other side, and cooperate to address "non-market practices" elsewhere.
Airbus said it welcomed the truce that would end "lose-lose" tariffs, which had also been imposed on planes.
Former EU member Britain, which was also involved in the dispute as a home to Airbus production, said it hoped for a similar deal within days. Tai is due to meet her British counterpart Liz Truss on Wednesday.
The EU-U.S. agreement removes one of two major trade irritants leftover from Donald Trump's presidency, the other being tariffs imposed on grounds of national security on EU steel and aluminum imports.
(Via Reuters)
