WASHINGTON -- The United States yesterday said it may reinstate a formal complaint with the World Trade Organization over government aid to aircraft maker Airbus after talks with European officials broke down.
"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 and Airbus.
But Mills said yesterday that over the past two months, European officials "have been backtracking and seeking to change the terms of that agreement. It's now demonstrated conclusively that they are not prepared to follow through on that agreement."
If the Europeans don't change their stance, the United States "will return to litigation to eliminate large civil aircraft subsidies," Mills said.
The comments came after a meeting yesterday between former U.S. Trade Representative Robert Zoellick and EU Trade Commissioner Peter Mandelson. Zoellick now serves as deputy secretary of state but continues to represent the United States in talks over Airbus.
U.S. and European officials had expressed optimism as recently as last month that the two sides could resolve the dispute without formal litigation. Mandelson told reporters that efforts to negotiate an agreement must accelerate to meet an April deadline.
The United States and the 25-nation EU announced Jan. 11 that they would try to resolve the Boeing-Airbus dispute over a three-month negotiating period, deferring the cases they have brought before the WTO accusing each other of providing WTO-illegal subsidies to the two makers of commercial jetliners.
A spokesmen for Airbus' parent company yesterday said the matter was between the United States and the European Union. "We view this as a government-to-government issue, and we leave it in their hands to resolve," said Guy Hicks, a spokesman for EADS North America. Airbus is 80 percent-owned by European Aeronautic Defence & Space Co.
Boeing spokesman Russell Young said Boeing was "disappointed to learn that the EU is not willing to end" the subsidies. "Boeing remains hopeful that an equitable agreement can be reached."
Chicago-based Boeing has long been frustrated that France-based Airbus has continued to get government money to help it develop new planes such as the A380, even though it has become Boeing's commercial equal in recent years. Last year, Airbus delivered more planes than Boeing for the first time, and it will do so again in 2005.
Democratic Sens. Patty Murray and Maria Cantwell of Washington state welcomed the U.S. announcement. Boeing formerly was headquartered in Seattle and remains the state's largest private employer.
"Our willingness to seek a negotiated settlement has been greeted by more arrogant entitlement from Airbus and its European backers," Murray said. "While publicly committed to negotiations, Airbus and European leaders have been working behind the scenes to continue subsidies to Airbus in spite of U.S. threats to file a WTO case."