U.S.-EU Talks on Boeing, Airbus Subsidies Falter

The United States said Friday that it might reinstate a formal complaint with the World Trade Organization over government aid to Airbus after talks with European officials faltered.

“Despite our best efforts, it’s clear that the [European Union] is unwilling to eliminate launch aid subsidies for Airbus,” said Richard Mills, a spokesman for the U.S. trade representative.

The two sides had agreed in January to try to resolve a decades-long dispute over government subsidies provided to aircraft giants Boeing Co. and Toulouse, France-based Airbus.

The U.S. trade office accused EU negotiators of backtracking from an agreement in January to resolve the matter.

The remarks were made after a meeting Friday between Deputy Secretary of State Robert Zoellick and EU Trade Commissioner Peter Mandelson.

EU officials expressed shock Friday over the remarks, saying they didn’t correspond with what their chief negotiator had taken away from the trade discussions.

“There are clearly difficult issues at stake, but [Mandelson] doesn’t recognize the portrayal of the state of play as offered by the U.S. side,” said Anthony Gooch, an EU spokesman.

In December, U.S. trade officials, on behalf of Chicago-based Boeing, filed an unfair trade complaint with the WTO alleging that Airbus had received government subsidies in developing and producing aircraft. A month later the two sides agreed to a three-month cooling-off period and to hold talks to resolve the issue.

“Although on Jan. 11, the EU agreed to a structure for eliminating large civil aircraft subsidies, over the past two months they’ve been backtracking and seeking to change the terms of that agreement,” Mills said.

It was not immediately clear whether the U.S. would return to the table for additional talks, but Mills said the U.S. would abide by the agreement not to file a formal complaint until the agreement expires next month.

“The U.S. is willing to hold to the standstill terms of the Jan. 11 agreement that precluded further subsidies,” he said. “But if the EU either breaks or refuses to extend the terms, we will return to litigation.”