CHICAGO, July 26 (AFP) - US officials are pushing their EU counterparts to renegotiate a 1992 pact that authorises state-subsidised loans to Airbus, the Wall Street Journal reported Monday.
Bowing to pressure from the Boeing Company, US officials have initiated discussions with European trade officials aimed at cutting off the supply of cheap finance to the European aircraft-making consortium.
Senior trade officials from both sides met in Geneva last week and agreed to meet again on the matter in September, the daily said.
The 1992 pact reportedly allows the European consortium Airbus to fund up to one-third of the cost of developing new aircraft with subsidised state loans. Under US proposals, Airbus could use loans already in the pipeline but no new loans could be approved, the Journal said.
The paper suggested that the United States could challenge fresh loans in the World Trade Organisation, if a bilateral agreement cannot be worked out.
The 1992 pact "has outlived its usefulness and if we can't agree to a new framework, we will terminate it," John Veroneau, chief counsel for the US Trade Representative's office, told the Journal.
The Boeing Company has long complained of what it sees as the market-distorting subsidies extended to its arch-rival Airbus by the European Union.
With Airbus now the world's leading producer of commercial aircraft, US officials believe they could make the case that the EU's preferential loans to Airbus constitute an unfair trade advantage.