Dispute between Brussels and Washington could go to World Trade Organisation after talks yield little progress
European Commission officials concede a deal with the USA over aerospace subsidies appears "difficult" after talks between EC trade commissioner Pascal Lamy and his US counterpart Robert Zoellick showed no signs of progress.
The pair met in Washington DC to discuss the escalating row over the 1992 trade accord governing aircraft manufacturing subsidies. The issue appears close to boiling over as the USA threatens to take it to the World Trade Organisation (WTO), while Europe continues to fight its corner vigorously.
The EC stresses the talks have not broken down. "There were no final positions taken by either side as to what should be the next step," it says. "It is true the process of renegotiating the 1992 [Large Commercial Aircraft] agreement seems difficult at this stage."
Boeing, through the US trade representative, argues the bilateral accord allowing Airbus EU subsidies is an outdated mandate from a period when the European manufacturer held a minor share of the large aircraft market.
Now the European manufacturer's production levels have overtaken its rival, the agreement should be abandoned, says Boeing.
The EU argues its direct subsidies are equal to the indirect subsidies Boeing receives through US military contracts and commercial grants and tax relief from US states to attract Boeing 7E7 manufacturing bases.
GRAHAM DUNN / LONDON
Source: Flight International
