Airline aid

The European Union says it is ready to begin talks over controversial state subsidies paid to European aircraft maker Airbus and US aid for aerospace corporation Boeing, a top EU trade official has said.

The talks would focus on efforts by both the EU and the US to have the other party stop providing aid to Airbus and Boeing, respectively.

EU Trade Commissioner Karel De Gucht told reporters the bloc could start talks "immediately," as long as there were no preconditions for future European government aid for Airbus's new A350 plane.

There are concerns that without state support Airbus and Boeing would struggle to develop large aircraft in the future.

At the heart of the dispute are subsidies paid by EU countries to Airbus for the A350. Germany alone pledged 1.1 billion euros ($1.5 billion) to Airbus for the new jetliner, which is seen as a possible future market rival for the Boeing 787 Dreamliner.

The US had filed a case with the World Trade Organization years ago which led to European governments being called on to stop providing such aid.

Airbus argues the WTO verdict does not apply to the A350 as it was handed down prior to the plane's development.

The WTO decision was only the first part of the long-running saga, with another ruling on a counter-complaint brought by the EU against US aid for Boeing expected later this year.

US trade officials also said they were ready to hold talks, "but any productive discussions must necessarily address all WTO-inconsistent subsidies to civil aircraft," USTR spokeswoman Nefeterius McPherson said.

dfm/AFP/Reuters

Editor: Nancy Isenson