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International Trade: Long-Term Viability of U.S.-European Union Aircraft Agreement Uncertain

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Report Type Reports and Testimonies
Report Date Dec. 19, 1994
Report No. GGD-95-45
Subject
Summary:

An objective of the 1979 Agreement on Trade in Civil Aircraft was to liberalize world trade in the civil aircraft industry through the removal of tariffs and other trade obstacles such as quotas, preferential technical standards, and export subsidies. However, trade tension between the United States and the European Union (EU) over the civil aircraft industry continued in the 1990s, due especially to U.S. concerns about continuing government support to EU large civil aircraft manufacturers. In July 1992, the United States and the EU entered into a bilateral agreement aimed at reducing government support to manufacturers of large civil aircraft--planes with a capacity of 100 or more passengers. This report assesses the (1) extent to which the agreement has proved viable in operation, (2) potential impact of changes in government support on the competitiveness of the U.S. large civil aircraft industry, and (3) the efforts of the United States and the European Union to extend coverage of the agreement to other nations with aerospace industries and to related aerospace products.

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