BRUSSELS - The European Union wants a negotiated settlement to a dispute with the United States over government aid to aircraft makers Boeing and Airbus, and will not be the first to bring the row before the World Trade Organisation, an aide to EU Trade Commissioner Peter Mandelson said Sunday.
A January ceasefire in the transatlantic dogfight expires Monday without any sign that it will be extended or that a deal will be reached in time.
"We are still interested in reaching an agreement that reduces the government support in this sector. We believe that both sides need now to review their position," aide Simon Fraser told reporters.
However, "it is not the EU's intention to move first on WTO action," he added.
"It is of course open for both the EU and the US, instead of negotiating, to refer the matter to the WTO but in our opinion this is better avoided," he stressed.
The EU and the US government on January 11 gave themselves 90 days to resolve their dispute over subsidies to Airbus and Boeing respectively, agreeing in the meantime not to extend any fresh subsidies or to seek WTO arbitration.
Each side accuses the other of pumping illegal state aid into its respective aircraft champion. But both want to avoid a long and bruising legal battle at the WTO.
Senior US official Robert Zoellick, the number two at the US State department and until recently US trade representative, has said he is "willing" to extend the 90-day ceasefire period to try to reach a deal.
The dispute has intensified with the European consortium Airbus preparing to roll out the world's biggest passenger plane, the A380 superjumbo, to supersede Boeing's 747 workhorse.
Washington says the A380 project would never have got off the ground without lavish government subsidies. The EU in turn suspects Boeing is enjoying indirect state help to develop its new long-range 787 "Dreamliner" plane.
04/10/2005 11:36 GMT