U.S., EU begin settlement talks on aircraft subsidies

U.S., EU begin settlement talks on aircraft subsidies    The European Union and the United States agreed Tuesday to settle their dispute over state subsidies for aircraft makers Airbus and Boeing through direct negotiations rather than pursue actions through the World Trade Organization.
   Both sides pulled their requests for WTO arbitration in December and will begin three months of talks to end commercial aircraft subsidies. They both also agreed to suspend new subsidies during the negotiation period.
   “For the first time in this longstanding dispute, the U.S. and the EU have agreed that the goal should be to end subsidies. To sharpen the focus of our work, we have further agreed to use the definitions and framework of the WTO subsidies rules as the basis for an agreement. This approach should also help us multilateralize the effort over time,” U.S. Trade Representative Robert Zoellick, said in a statement.
   After a bilateral fair-trade agreement is reached, the two sides will work to get other countries with civil aircraft industries, including major suppliers to Airbus and Boeing, to adopt it, according to the USTR.
   The dispute escalated last year after the United States terminated a decade-old agreement permitting limited subsidies to commercial aircraft producers expired. The United States argued that the EU was not phasing out state aid as the agreement required. The United States filed a complaint against the EU over state aid to Airbus and the EU retaliated with an action for U.S. support of Boeing.