Solution to disputes with EU over aircraft, metals 'within reach' - Tai

By David Lawder

WASHINGTON (Reuters) -U.S. Trade Representative Katherine Tai said on Thursday that she believes solutions to trade disputes with the European Union on aircraft subsidies and steel and aluminum "are within reach."

Tai told the U.S. House of Representatives Ways and Means Committee that she is "very serious" about resolving the 17-year Boeing-Airbus World Trade Organization dispute over subsidies within a four-month tariff truce due to expire this summer.

On the transatlantic trade dispute over U.S. steel and aluminum tariffs and EU retaliation against U.S. motorcycles, whiskey and other products, Tai has tied any resolution to addressing longstanding global excess production capacity for those metals largely centered in China.

"We are also working to resolve the ongoing Boeing-Airbus dispute and address the real problem of overcapacity in the steel and aluminum sectors. Solutions to both are within reach," she said.

The EU has threatened to double the tariffs on Harley-Davidson (NYSE:HOG) motorcycles, American whiskey and power boats on June 1 if Washington maintains its "Section 232" national security tariffs.

Tai said she would meet next week with her Mexican and Canadian counterparts to discuss a range of irritants under the new U.S.-Mexico-Canada Agreement on trade that took effect last year.

Tai pledged to bring up two labor rights complaints with Mexico at the meeting, involving allegations surrounding a union contract vote at a General Motors (NYSE:GM) pickup truck plant in Silao and anti-union activity at the Tridonex auto parts factory in Matamoros, which borders Texas.

Tai also said she would raise issues at the USMCA Free Trade Council meeting over U.S. access to Canada's dairy market, a long running U.S.-Canadian lumber dispute, and Mexico's plans to stop importing genetically modified corn and a ban on the widely-used glyphosate herbicide.

President Joe Biden's trade chief also told lawmakers that the administration needs to rethink Trade Promotion authority -- the "fast-track" negotiating authority for trade deals that expires on July 1 -- to make it more relevant to a U.S. economy that is recovering from the COVID-19 pandemic.

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She declined to say when the administration would consider an effort to renew the TPA authority, which is seen as crucial to negotiating major new trade deals. Many Democrats in Congress do not view new trade deals as a high priority and would rather see the Biden administration step up enforcement of existing trade agreements.