EU-US deal on air dispute

EU and US have agreed to begin talks on ending subsidies given to aircraft makers, EU Trade Commissioner Peter Mandelson has announced.
Both sides hope to reach a negotiated deal over state aid received by European aircraft maker Airbus and its US rival Boeing, Mr Mandelson said.

Airbus and Boeing accuse each other of benefiting from illegal subsidies.

Mr Mandelson said the EU and US hoped to avoid resolving the dispute at the World Trade Organisation (WTO).

Bilateral talks

“With this agreement the EU and US have confirmed their willingness to resolve the dispute which has arisen between them… and to devote time and resources to doing so by negotiation rather than pursuing the dispute through WTO panels,” Mr Mandelson said.

Last year, the US terminated an agreement with the EU, reached in 1992, which limits the subsidies countries can hand over to civil aircraft makers.

The US filed a complaint against Brussels with the WTO over state aid to Airbus, prompting a retaliatory EU complaint over US support for Boeing.

However, both sides agreed to suspend their requests for WTO arbitration at the beginning of December, to allow bilateral talks to continue.

European Commission president Jose Manuel Barroso said on Monday that he was looking for a compromise solution to the dispute.

Airbus overtook Boeing as the world’s largest manufacturer of commercial airliners in 2003.

http://news.bbc.co.uk/1/hi/business/4164755.stm