BRUSSELS (AFP) - The United States wants Europe to end all future government support for Boeing`s arch-rival in commercial plane-making, Airbus Industrie, or face legal action, a senior official said.
Speaking on the eve of a meeting gathering EU and US aviation experts, John Veroneau, general counsel at the US Trade Representative`s office, said it was time to scrap a 1992 agreement that has allowed Airbus to catch up with Boeing.
Veroneau, denying that the new-found US pressure was "election year politics", said: "The infant of Airbus has certainly grown up and is a full-grown adult now. Now is the time to turn off those subsidies."
The official reaffirmed that Washington would sue the EU at the World Trade Organisation -- potentially opening the way to billions in compensation -- if it does not get satisfaction in the talks, which begin Thursday in Brussels.
In a rude shock to a company that once enjoyed overwhelming dominance in the commercial aviation industry, Boeing has now been overtaken by Airbus in aircraft deliveries.
Airbus has, with the acceptance of the US government under the 1992 agreement, been allowed to receive up to one-third of its research and development costs from European governments.
Those subsidies, according to Boeing, have amounted to 35 billion dollars (28.7 billion euros) over the past 12 years.
The issue has become all the more charged politically as President George W. Bush seeks re-election in November.
Bush, speaking on a campaign stop last month at Boeing`s production base in Seattle, Washington state, vowed to take the case to the WTO if EU countries do not agree to end the subsidies.
In particular, the US government is anxious to see that such benefits do not apply to future aircraft after the new Airbus A380 line of superjumbos, on which the European company is staking its future.
But EU officials retort that Boeing benefits from "indirect subsidies" through billions of dollars in contracts for military planes and research and development awarded by the US government.
"Any changes to the (1992) agreement should make sure that Boeing does not get any more support than Airbus would get in the form of direct support," European Commission spokeswoman Arancha Gonzalez said Tuesday.
In the tit-for-tat trading of charges, Boeing stands accused by the European Aeronautic, Defence and Space Company (EADS), which controls 80 percent of Airbus, that it has received illegal state aid for its new 7E7 plane.
The co-chief executive of EADS, Philippe Camus, said this month that it should be determined if assistance for the development of the 7E7 was compatible with the 1992 accord and with WTO rules.
While Airbus says the huge A380 is the future of passenger aviation, Boeing is convinced that the market wants a smaller, fuel-efficient workhorse like the 7E7.
At stake is the future commercial success of the two companies, hence the importance that both sides are attaching to the Brussels meeting.
Veroneau denied that Boeing had received direct subsidies from the US government, and said that Britain`s BAE Systems, Airbus`s other main shareholder, was just as active in the US defence market.
He acknowledged, however, that tax breaks given to Boeing by Washington state would have to be covered in the EU negotiations.
"Any disciplines that would be included in a bilateral agreement would be two-way," the official said, adding: "We need a new agreement. What we are seeking is fundamentally different to the `92 agreement."
The EU says it is not averse to renegotiating the 1992 agreement provided both companies emerge on a level playing field with both direct and indirect support taken into account.