PARIS - EU trade chief Peter Mandelson and his new US counterpart agreed Monday to continue negotiations to resolve a row over state aid to rival aircraft makers, as opposed to taking legal action, officials said.
The agreement between Mandelson and new US trade representative Rob Portman came at their first face-to-face meeting, held in Paris on the sidelines of a ministerial meeting of the Organization for Economic Cooperation and Development.
"Mr. Mandelson and Mr. Portman agreed that a negotiated solution remained the most desirable option. They agreed to continue their dialogue," said a joint statement released by the European Commission in Brussels.
But Mandelson's spokeswoman, Claude Veron-Reville, said that no timetable for a possible resumption of formal negotiations had been agreed.
"The meeting was consensual, constructive, quite brief and most of it was to do with the Doha Round," she said, referring to World Trade Organization (WTO) negotiations which are supposed to reach a conclusion at the end of this year.
Both sides have threatened to take the dispute, over state subsidies to European aircraft maker Airbus and US rival Boeing, to the WTO.
The United States believes financial aid given to Airbus to launch new aircraft is illegal, while the Europeans accuse the US of subsidising Boeing through military contracts.
Mandelson and Portman also discussed the need to "reinvigorate" the Doha Development Round of international trade talks.
"Both men committed themselves to work for a success at December's Hong Kong meeting," the commission said. "They highlighted the need for significant and balanced progress in the negotiation and for ministerial-level engagement in areas like industrial tariff reductions, the impending deadline for the submission of improved services offers, and progress in rules and agriculture."
The US and EU will hold a trade summit in Washington on June 20.
The commission did not say whether the two men had discussed the growing dispute with China over its surging textile exports.
Governments in the US and EU have been under pressure to impose protectionist measures to try to curb a surge in Chinese exports following the expiry of a 31-year-old global textile quota system in January this year.
Portman, confirmed in his post on Friday by the US Senate, and Mandelson are in Paris for the OECD meeting and were to participate in discussions on Wednesday with other trade officials on efforts to progress the stalled Doha round of world trade talks.
In an interview appearing Monday in The Wall Street Journal Europe, Portman said he hoped his appointment would mark "a fresh start" in efforts to resolve the US-EU aviation subsidy dispute.
But he also warned that Washington and Brussels maintained different approaches to the question of how much state aid should be allotted to Boeing and Airbus.
"I'm hopeful, and I think a fresh start can be helpful in moving all these issues forward," Portman told the paper.
"But I think it's also important to realize there is a reason we have a difficult time with this issue and that is we have a different approach at this point."
Mandelson and Portman's predecessor, Robert Zoellick, clashed bitterly on the aviation subsidy question, which could ultimately be decided by the WTO in the absence of a bilateral agreement.
Portman said there would be no change in the US position.
"The US position is clear," he said. "We wish to end subsidies and prefer a negotiated solution."
05/02/2005 16:57 GMT