Boeing optimistic on EU-US subsidy talks

The US aircraft manufacturer Boeing voiced optimism Friday that its row with European reval Airbus over government subsidies would be resolved through US-European Union negotiations.

"We are optimistic and pleased that the two governements are sitting down and having these discussions," Ted Austell, Boeing's vice president for international trade, told AFP.

"We are very encouraged and are optimistic that perhaps the governments will find a negotiated outcome here some time in the not too distant future."

He was speaking on the second day of US-EU consultations taking place under the auspices of the World Trade Organization.

The parties holding the contacts in a bid to settle a subsidy row, with each accusing the other of offering unfair government assistance to its civil aviation industry.

The United States and the European Union lodged reciprocal complaints on the matter with the WTO on October 6.

The current round of consultations, scheduled to end later Friday, is seen as a forum for each side to present its case.

If no agreement is reached within 60 days, each party has the right to ask the WTO to resolve the dispute within a time period of six to nine months.

Austell insisted that the US action against the EU, an initiative taken a month before the November 2 presidential election, had not been politically motivated.

"The election was a distraction. Now that the election is out of the way, our (European) collegues here will see that these are real issues," he said.

A WTO arbitration procedure could come back to haunt the parties, with the WTO ordering them to pay heavy fines if found to have made available illegal subsidies.

But Robert Novock, a lawyer retained by Boeing, said "a negotiated settlement is always better than going through the time-consuming process of litigation."

He said WTO arbitration would determine if subsidies offered by one side caused harm to the other, arguing that it is Boeing that is suffering from the effects of of state assistance to Airbus.