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U.S. sides with China against airlines emissions tax
Pressure against EU plan grows
Question of the Day
The European Union’s plan to impose a tax on international airlines for their carbon emissions has run into fierce head winds, with the Obama administration joining China, India and other powers in a growing global drive to force the EU to back down.
Top European aviation companies this week issued a public plea for EU leaders to reverse course on the “emissions trading scheme,” while Airbus, the giant European consortium that competes with American aerospace giant Boeing Co., said Thursday that the standoff has put into doubt another major jet sale.
European officials have resisted the pressure, but the uproar shows no signs of subsiding, and some private analysts say the bloc has picked a global, multifront trade fight that it cannot win.
“It’s a tricky one: Fight a trade war with the entire world, or back down,” said Richard Aboulafia, vice president of analysis at Virginia-based Teal Group. “I’m thinking they’re going to back down.”
China is one of the biggest opponents of the plan, which would tax airlines for their carbon outputs for flights to or from Europe. The controversial part of the tax, which has drawn complaints that the fee is illegal under international trade law, is that it is assessed based on the entirety of the flight distance, not just the part spent over European airspace.
At a meeting last month in Moscow, almost 30 countries adopted a resolution threatening Europe with eight forms of retaliation they would consider if the charge is not scrapped. Among those measures are bringing legal cases before international trade forums, not granting European carriers landing rights and routes, and new levies against EU national airlines.
“It’s very rare that markets will forbid any of their nation’s airlines from obeying a law in another country,” Mr. Aboulafia said. “That demonstrates a clear signal that this is not even negotiable.”
This intensifying pressure led Airbus and six European airlines to write a letter earlier this week asking the leaders of Britain, France, Germany and Spain to back down from the plan. They say the scheme will jeopardize more than 1,000 Airbus jobs and another 1,000 in the supply chain, and it will result in “suspensions, cancellations, and punitive actions” by other countries.
Companies signing the letter were British Airways PLC, Virgin Atlantic Airways Ltd., Lufthansa AG, Air France-KLM, Air Berlin PLC & Co., Iberia Airlines, as well as aerospace engine makers Safran of France and MTU Aero Engines of Germany, which said the standoff “is becoming intolerable for the European aviation industry.”
“We have always believed that only a global solution would be adequate to resolve the problem of global aviation emissions,” they wrote.
The European governments, however, have shown no signs of backing down.
Silvia Kofler, spokeswoman for the European Union Delegation to the U.S., said in a statement that Europe will “stick to its legal provisions.”
© Copyright 2014 The Washington Times, LLC. Click here for reprint permission.
About the Author
Tim Devaney is a national reporter who covers business and international trade for The Washington Times. Previously, he worked for the Detroit News, Grand Rapids Press, Portland Press Herald and Bangor Daily News. Tim can be reached at firstname.lastname@example.org.
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