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US, EU to discuss aircraft aid

Brussels - US Deputy Secretary of State Robert Zoellick is likely to discuss a stubborn dispute with the European Union over aid to aircraft makers Boeing and Airbus in Brussels next week, officials said Friday.

Zoellick - who was US Trade Representative until being moved to the State Department in January - is expected to bring up the issue despite the absence of EU Trade Commissioner Peter Mandelson.

A spokeswoman for the European Commission, the EU's Brussels-based executive arm, said she was "sure it will come up. It would be surprising if it were not mentioned."

Zoellick, who is still in charge of the Airbus-Boeing issue despite changing jobs, will hold talks on Monday with Benita Ferrero-Waldner, the EU external relations commissioner. Mandelson will be on a foreign trip.

In October the US lodged a complaint with the World Trade Organisation (WTO), which brought a counteraction from Brussels against what it termed were indirect US government aid for Boeing through defense and research contracts.

Then in January the two sides pulled back from WTO action, giving themselves 90 days to negotiate a phasing-out of subsidies to develop commercial aircraft in a bid to avoid a bruising legal battle.

But Zoellick said earlier this week that Washington and the EU would probably miss an April 11 deadline to resolve the dispute.

"From my last conversation with Commissioner Mandelson I do not see (an accord) in the time that we set forth," he said, referring to a telephone call which ended abruptly, with both sides saying the other put the phone down.

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