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EU, US Signal Willingness to Resume Aircraft Subsidy Talks

  • Douglas Bakshian

The United States and the European Union both say they are ready to resume negotiations on subsidies to aircraft makers Boeing and Airbus, but the sides have not set a date as a deadline for legal action approaches.

European Commission spokeswoman Francoise le Bail told reporters in Brussels the European Union is ready to restart the talks, once it gets a clear signal.

"The Commission is of course prepared to resume discussions with its American counterpart as soon as the Americans are ready," she said. "We have had not reaction so far to the proposals which had been made by [EU Trade Commissioner Peter Mandelson] Mr. Mandelson."

Her remark follows a statement by Deputy Secretary of State Robert Zoellick on Monday that the United States is willing to resume the talks if the European Union follows negotiation guidelines that were agreed to in January.

At the time, the sides suspended their cases at the World Trade Organization and agreed to try to reach a negotiated settlement by April 11. They also agreed to a freeze on subsidies to Boeing and Airbus during the three-month period.

The European Union says Airbus is hit hardest by cutting off subsidies because it benefits from aid for launching new aircraft, while Boeing enjoys permanent indirect support through federal military and space projects.

Washington says the European Union has broken trade rules by giving billions in loans to Airbus since 1967. Washington wants the subsidies stopped.

Airbus is in the process of launching a major new plane, the A350, which will compete with Boeing's new 787 regional jet, so the subsidies are of critical importance. Mr. Zoellick has said that if negotiations fail, the WTO is there to resolve such issues.

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