BRUSSELS - US Deputy Secretary of State Robert Zoellick said Monday the US was ready to negotiate a stubborn dispute with the European Union over aid to aircraft makers Boeing and Airbus after a deadline next week, but would press the case at the WTO if talks failed.
Both sides agreed in January to negotiate a phasing out of subsidies to develop commercial aircraft, thus avoiding taking the issue to the World Trade Organization.
They set a 90-day period to hammer out a deal, but there has been little sign of an agreement even though the April 11 deadline is fast approaching.
"If need be we are willing to carry the standstill beyond the 90-day period if the European Union can carry through on the core principles that we agreed on in January, but if not that is what the multilateral system is for," Zoellick told a news conference.
Zoellick -- who was US trade representative until being moved to the State Department in January -- was in Brussels to discuss the subsidies issue, among other matters, with the EU external relations commissioner Benita Ferrero-Waldner, in place of EU trade commissioner Peter Mandelson, who was abroad.
Ferrero-Waldner said: "I very briefly conveyed the message from Peter Mandelson that he would like still to have this two-phased approach until the 11th of April, but let's see how things evolve and it's of course up to those who really go into details."
Zoellick said that the dispute would not hold up the current, so-called Doha round of multilateral trade negotiations at the WTO.
"This talk that it would interfere with the Doha agenda is not talk that I would subscribe to," he said.
In October the United States lodged a complaint with the WTO, which brought a counteraction from Brussels against what it termed was indirect US government aid for Boeing through defense and research contracts.
Then in January the two sides pulled back from WTO action, giving themselves the 90-day cooling down period to negotiate a phasing-out of subsidies to develop commercial aircraft in a bid to avoid a bruising legal battle.
But Zoellick said last week that Washington and the EU would probably miss the April 11 deadline to resolve the dispute.
04/04/2005 16:52 GMT