- The Washington Times - Monday, May 2, 2005

Rob Portman, sworn in as U.S. trade representative last week, and his European counterpart yesterday said they would try to negotiate a settlement in a bitter trans-Atlantic trade fight over subsidies to commercial aircraft manufacturers.

The United States and 25-nation European Union have moved to the brink of World Trade Organization litigation in the dispute, a step that would likely end with each side facing an embarrassing ruling critical of billions of dollars in government payouts.

EU Trade Commissioner Peter Mandelson and Mr. Portman, in his first overseas trip as President Bush’s top trade envoy, did not solve the problem, but their first meeting appeared to ease what had been escalating tension.

“Both reiterated their view that a negotiated solution remains the most desirable option. They agreed to continue their dialogue and keep the lines of communication open,” Richard Mills, Mr. Portman’s spokesman, said from Paris, where the two men met.

An EU statement echoed Mr. Mills’ description of the meeting.

The United States in October filed a WTO suit asserting that European governments pay illegal subsidies to Airbus, a multinational consortium based in France. The European Union immediately countered with a suitsaying that Chicago-based Boeing Corp. receives illegal tax breaks and other benefits.

The sides have not taken the next step — presenting their cases before WTO judges — though negotiations to eliminate illegal payments had stalled and a self-imposed April 11 deadline to end the dispute passed with no resolution.

Neither side yesterday announced any change in policy. In the meantime, Airbus is developing a new aircraft and already has asked for government-guaranteed loans — the subsidy that riled Boeing and the Bush administration.

The European and U.S. manufacturers are fierce rivals.

Airbus in 2003 eclipsed Boeing’s sales of commercial aircraft. The company recently began marketing the A380 jumbo jet and is designing another aircraft, the A350. Boeing is competing with its new 787 Dreamliner.

Mr. Portman, a former Ohio congressmen sworn in as the president’s top trade envoy Friday, and Mr. Mandelson met for the first time as part of an informal WTO session.

Trade negotiators from several nations are meeting this week in Paris in an effort to advance global talks, known as the Doha Development Agenda. The negotiations have bogged down as the WTO’s 148 members argue over trade barriers, farm policies and other rules.

The United States and European Union are the WTO’s biggest members and key players in the talks, but the U.S.-EU battle over aircraft subsidies has tainted the trans-Atlantic relationship.

The global talks are a priority for both sides.

“This meeting focused on how to reinvigorate the Doha Round negotiations,” the European Union said of Mr. Mandelson and Mr. Portman’s lunch together.

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