The Wto's Role and Importance in Mitigating International Conflicts: Case Study of Europe Versus USA

Published: 2021-09-23 05:25:09
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Category: Politics

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Abstract
In a world built on trade, and in the recent past, air travel, what happens when two major countries file a dispute against each other and their respective domestic and international air travel company? In the WTO case, European Union v. United States of America, exactly that happens. After being accused of providing unfair, illegal, and trade violating governmental subsidies to Boeing Co., the United States then declined all solutions the European Union put forth to solve the issue, resulting in a complaint being filed with the WTO. With an expected decision late this year, or early next year, the stakes are high as both countries threaten sanctions onto the other.
Dispute Overview
Today, the world is built on trade. With such a large part of today’s economy based on trade there are bound to be disputes. One dispute that is currently occurring is United States v. European Union disputing the level of support they are allowed to give their domestic aircraft industry, Boeing Co. and Airbus Group SE in this case. The looser of the case may be responsible for billions of dollars in retaliatory trade measures.What did they do?
Developing aircraft can be expensive and difficult. The United States assisted Boeing financially by giving them $5 Billion in improper subsidies throughout the development of the 737 Dreamliner. However, in a separate WTO investigation, the WTO revealed that AirBus had been benefiting from government subsidies for ages, making this complaint unfair. The European Union attempted to solve this without the WTO, however, after Boeing rejected their list of resolutions, did bring it to the WTO for a ruling. The European Union was also giving loans to Airbus at lower than market interest rates, as well as grants to complete the building of their newest plane. Because of this, the United States is now trying to impose sanctions on the European Union. The WTO will decide which sanctions get to be imposed.
What’s Going to Happen?
What happens with the case completely falls onto the WTO. The European Union wants to impose billions of dollars in trade sanctions on the United States. If the European Union decides to impose these sanctions on the United States, it may mean losing them as a trade partner all together. This would not only have detrimental effects on the economies of both countries, causing the quality of life to decline, and decline quickly for the citizens in both countries. Not only that, but a strong ally would be lost resulting in danger to the wellbeing of our country. However, we will not know what the WTO desires to do about the situation until late this year or possibly even as late as early January, 2018.
What Will Happen To Boeing
Boeing is still able to continue the development and production of its aircraft, however, they will have to do so without the Federal Governments help. The United States stopped all tax breaks with Boeing as well as financial support from the Aerospace, as well as Defense departments. Boeing will not be in any legal trouble but may struggle financially to finish supporting their construction of the 737.
Why The WTO Plays Such An Important Role
The WTO, is extremely important in this case because it was revealed that both countries, the United States, as well as the European Union, were providing illegal subsidies. Both countries now want to impose sanctions on the other which would quickly lead to disastrous economic results. So it is up to the WTO to decide which country is allowed to place the sanctions, if either of them are.
What Would I Do?
If I were the WTO, I would not allow either country to place sanctions onto the other. Considering that both were providing illegal government funded subsidies to their respective domestic air transportation companies. Since they are unlikely to completely stop providing the subsidies to their companies, instead of imposing sanctions, I would just lax the restrictions and allow the respective governments to assist their respective companies, for the sake of growth in the air industry, as well in the countries economies. This would allow for the assistance while also growing the fields mentioned earlier.

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