EU Ponders Termination of Brexit Agreement – What Would This Mean for Aviation?

October 22, 2021 by Leave a comment

Bloomberg has reported that the EU is considering terminating the EU-UK Trade Agreement instituted to manage trade following Brexit. This could have a tremendous affect on aviation, because that agreement currently permits the EU aviation community to use aircraft parts produced in the UK.

The Trade Agreement between the UK and EU details the scope of cooperation between the UK and EU in aviation safety. One important element is found in the AVSAF-1 (aviation safety) Annex which provides that the EU will recognize UK production approvals and accept UK CAA Form 1 on new production parts. Without this provision from the trade agreement, EU installers might be unable to receive and install an aircraft part that was produced in the UK.

This creates unnecessary confusion in the aviation world, because certain previously-acceptable tags could become unacceptable. For example, a party installing a part on an aircraft registered in the EU might be unable to install – and might be unable to even receive – a new-and-otherwise-airworthy aircraft part that had been produced and documented in the United Kingdom.

There is no timetable for rejection, and it seems unclear whether this even a reasonable path, but the aviation industry needs to remain aware of this possibility and needs to plan how it will support airworthiness in the face of such technical differences.

Filed under Uncategorized Tagged with , , , ,

New Agreement With China – No Relief for US Aircraft Parts Importers

January 16, 2020 by 2 Comments

I almost titled this post “Boeing Wins. Aviation Loses.”  But I am not sure that Boeing even wins under this Agreement.

The United States and China have signed a new trade agreement.  For most of the aviation industry, very little changes.  Aircraft parts imported into the United States that were subject to the 25% duty associated with the section 301 tariff, continue to be subject to the 25% duty levied on parts from China.

China has agreed to place orders for additional manufactured goods.  The list of manufactured goods includes complete aircraft, but does not include aircraft parts.  The obligation can be met by merely placing orders.  Thus China can meet its obligations under the new agreement by placing orders for aircraft for the first three years and then refusing delivery after the three year term of the agreement.  So even though it looks like this could be a boon for Boeing, it might not be as beneficial as one might think.  Furthermore, there is no agreement to purchase aircraft parts, and companies like Boeing sell a significant volume of parts.

The agreement does not appear to change the List One tariffs.  The list one tariffs became effective on July 6, 2018 and placed an additional duty rate of 25% on $34 billion worth of goods from China.  The list one goods include (but are not limited to):

  • 40113000 (New pneumatic tires, of rubber, of a kind used on aircraft)
  • 40121300 (Retreaded pneumatic tires, of rubber, of a kind used on aircraft)
  • 84071000 (Spark-ignition reciprocating or rotary internal combustion piston engines for use in
    aircraft)
  • 84091000 (Parts for internal combustion aircraft engines)
  • 84111140 (Aircraft turbojets of a thrust not exceeding 25 kN)
  • 84111240 (Aircraft turbojets of a thrust exceeding 25 kN)
  • 84112140 (Aircraft turbopropellers of a power not exceeding 1,100 kW)
  • 84112240 (Aircraft turbopropellers of a power exceeding 1,100 kW)
  • 84118140 (Aircraft gas turbines other than turbojets or turbopropellers, of a power not
    exceeding 5,000 kW)
  • 84118240 (Aircraft gas turbines other than turbojets or turbopropellers, of a power exceeding
    5,000 kW)
  • 85030045 (Stators and rotors for electric generators for use on aircraft)
  • 85030090 (Parts for electric generators suitable for use on aircraft)
  • 85443000 (Insulated ignition wiring sets and other wiring sets of a kind used in vehicles, aircraft
    or ships)
  • 88031000 (Parts of airplanes and other aircraft, propellers and rotors and parts thereof)
  • 88032000 (Parts of airplanes and other aircraft, undercarriages and parts thereof)
  • 88033000 (Parts of airplanes and helicopters, not elsewhere specified or included)

As a condition of the agreement, the United States apparently agreed to cut certain (non-aviation) tariffs from a 15% duty to a 7.5% duty.  The USTR Fact Sheet acknowledges that “The United States has agreed to modify its Section 301 tariff actions in a significant way.”  These alleged modifications/reductions in duty rates are not part of the written agreement between China and the US, that has been released, so it is possible that US importers will continue to pay these duties.

Filed under Uncategorized Tagged with , , , , , , ,

U.S. Considering Tariffs on European Aircraft and Aircraft Parts

April 9, 2019 by 1 Comment

The Office of the U.S. Trade Representative has announced a preliminary proposal to implement new tariffs on a range of European products with a significant focus on the civil aviation sector, including both parts and completed aircraft.  The proposed tariffs arise as a result of a long-running WTO case brought by the U.S. against the EU and France, Germany, Spain, and the UK.  The WTO found that the EU provided substantial “launch aid” to Airbus and that those subsidies both helped Airbus launch its commercial aircraft and cost Boeing market share.

The purpose of the tariffs (or countermeasures) is to offset the estimated $11 billion per year in trade harm the USTR estimates result from EU subsidies.

It is unclear at this point at what rate tariffs would be imposed on the particular goods identified.  The proposed HTS numbers affected include numbers that are very familiar to the distribution community, including 8803.20.0030, 8803.30.0030, and 8803.90.9030, however, the scope appears to be limited to parts imported “for use in new civil aircraft, not for use by the Department of Defense or the U.S. Coast Guard, of an unladen weight exceeding 15,000 kg provided for in statistical reporting numbers 8802.40.0040, 8802.40.0060 and 8802.40.0070.” Thus from the language it appears the countermeasures target the importation of parts used in the manufacture of new aircraft, but not for the maintenance of the existing fleet.  Anyone supporting the production of new civil aircraft would be well advised to review the HTS numbers proposed for countermeasures.  They can be found here.

The USTR has requested public comments on the proposed action.  Comments can be submitted through http://www.regulations.gov under docket number USTR-2019-0003.  Any comments must be submitted by May 28, 2019.

Filed under Uncategorized Tagged with , ,

Have You Encountered Trade Barriers?

August 4, 2013 by Leave a comment

The U.S. International Trade Commission (USITC) wants to solve your trade problems!

On July 30, the USITC announced that they are putting together a report that will identify trade-related barriers affecting U.S. small and medium-sized enterprises (SMEs).  The focus is on trade with the European Union (EU).  As part of the information-gathering process, they will be conducting an October 8 hearing on these issues.

This is our opportunity to identify anything that adversely affects trade between the US and Europe.  The United States is negotiating a trade agreement with the EU so this hearing is an excellent opportunity to get our concerns addressed (before it is too late!).

Pre-hearing written comments are due by September 20, 2013.  ASA plans to submit a filing addressing our members’ concerns to please get your comments into ASA not later than September 13, so we can make sure your comments are reflected in our filing.

Full text of Federal Register Notice:

https://www.federalregister.gov/articles/2013/07/30/2013-18272/trade-barriers-us-small-and-medium-sized-enterprises-perceive-as-affecting-exports-to-european-union

Filed under Uncategorized Tagged with , , ,