Transatlantic air war talks agreed

The EU and the US agreed today to settle their dispute over Airbus and Boeing subsidies through bilateral talks and not at the World Trade Organisation.

The European Commission said the two sides “will not request establishment of WTO panels to the pending disputes”.

The EC said the EU and Washington ”confirmed their willingness to resolve the dispute which has arisen between them over trade in large civil aircraft, and to devote time and resources to doing so by negotiation rather than pursuing the dispute through WTO panels”.

Trade Commissioner Peter Mandelson said he and US Trade Representative Robert Zoellick were "able to agree a way forward".

The EC said trade negotiators would hold three months of talks to try to “eliminate different types of subsidies and to establish fair market-based competition” between the two aircraft manufacturers.

The two sides also agreed to refrain from giving new aid – for large civil aircraft development or production – to Airbus and Boeing during the talks.

“For the first time in this long-standing dispute, the US and the EU have agreed that the goal should be to end subsidies,” Zoellick said.

The talks will specifically try to reduce subsidies and come up with a list of approved aid the aircraft makers can still receive.

“The agreement will be enforced through transparency and strong dispute settlement procedures,” according to the text of the agreement.