- The Washington Times - Tuesday, May 16, 2006

The Bush administration yesterday told Europe that giving new subsidies to aircraft manufacturer Airbus would worsen an ongoing trade dispute.

“The United States has made it clear for over two years now that launch aid for the A350 is unacceptable. Our position hasn’t changed,” said Neena Moorjani, spokeswoman for the U.S. Trade Representative’s Office, referring to government-subsidized loans to help build one of Airbus’ models.

Reuters yesterday reported that Airbus may ask European governments for more aid to help with the redesign of the A350, which is falling behind Boeing’s new 787 in the race for airline orders.

“Increasing the amount of launch aid already committed to the A350 only makes the problem worse,” Miss Moorjani said.

The United States and European Union in October 2004 filed suits at the World Trade Organization contending that each government gives its domestic aircraft industry illegal subsidies. It is the largest case in the WTO’s history.

Airbus, based in Toulouse, France, and Boeing Corp., headquartered in Chicago, are locked in a fierce competition for sales of large commercial aircraft.

The Bush administration had hoped the dispute would ease after Congress last week voted to repeal a major tax break that benefited Boeing and other U.S. manufacturers.

Both sides have said they prefer a negotiated solution, but have made little progress in avoiding a WTO hearing.

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