U.S., EU to Resume Aircraft Subsidy Talks

The top trade officials from the United States and the European Union (search) said Friday they were willing to resume discussions aimed at resolving a bitter dispute over government subsidies to the world's two biggest airplane manufacturers, Airbus (search) and U.S.-based Boeing Co. (BA)

The announcement represented a change of position for the EU, which had insisted that it would halt all efforts to reach a negotiated settlement after the Bush administration announced in late May that it was going ahead with a case charging the EU with providing illegal subsidies to the European Airbus. The 25-nation EU quickly filed its own case before the World Trade Organization (search) accusing Boeing (search) of receiving illegal subsidies.

No date was announced for when formal negotiations might resume, but both U.S. Trade Representative Rob Portman (search) and EU Trade Commissioner Peter Mandelson (search) stressed that they wanted to keep the lines of communication open in a continued search for a settlement.

"We both would like to see a negotiated settlement," Portman told reporters.

Asked about the EU's change in positions, Mandelson said no one should have assumed that he would stop talking to Portman about ways to resolve the dispute.

"The channels of communication between us are open," Mandelson said. "Are you suggesting that Rob and I would stop talking to each other? You must be joking."

On whether the prospects for a resolution had improved, Mandelson said, "I am a politician so therefore I am an optimist."

However, it was unlikely that the agreement to resume discussions would produce results any time soon in the long-running dispute. No date was set for new talks and both sides remain intent on pursuing their individual WTO cases.

Neither Mandelson nor Portman would discuss reports that, as a way of resolving the dispute, Airbus has offered to give up the controversial loans it receives from European governments to develop new planes. The Airbus offer was not expected to change the position of Boeing officials because it was made with a number of conditions attached.

The administration announced on May 30 that it was resuming a WTO case against the EU, and the Europeans followed up the next day with their own announcement saying they would refile their case against the United States.

The administration said it had no choice but to act because of preparations being made by EU-member nations to commit $1.7 billion to Airbus for developing a new airplane, the A350 (search).

This plane is viewed as a direct competitor to Boeing's new 787 (search) Dreamliner in the market for mid-size, long-distance jets.