'Window of opportunity' for EU-US aircraft spat

Brussels will not initiate a dispute at the WTO over aircraft subsidies, and insists that "a window of opportunity" exists for both sides to reach an amicable agreement.

Today's three month deadline for resolving the Boeing - Airbus spat has not been met, a spokeswoman for EU trade chief Peter Mandelson said it would not trigger any automatic legal action.

"This date doesn’t mean that it triggers any automatic action and we believe that we should pause for further reflection and assess the situation".

"We do not intend to initiate a dispute at the WTO. As long as no action, is taken there is a window of opportunity for negotiation," added the spokeswoman.

But she cautioned that the next negotiating period could not last indefinitely.

"The period cannot continue for too long because there are important commercial interests is at stake."

Talks between US trade secretary Robert Zoellick and EU trade chief Peter Mandelson, ongoing since January, have been slow to make progress and were marred last week by sharp criticisms from both sides.

The A350 is set to be a direct competitor of Boeing's 787 Dreamliner.

Airbus is set to ask for €1bn in launch aid for the A350 but Washington has said it would prolong talks only as long as the aid was witheld.

Last year Washington unilaterally denounced a 1992 US-EU agreement limiting subsidies to civil aircraft makers and filed a complaint with the WTO over state aid to Airbus.

On the same day, the EU retaliated with a complaint over US support for Boeing and both sides have locked horns on the issue since.

In January they agreed to suspend WTO hearings and pursue a settlement by the April 11 deadline.

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