Brussels, 10/02/2005 (Agence Europe) - Subsidies to Airbus and Boeing aircraft builders were at the centre of discussions in Washington on Wednesday between European Commissioner for Trade, Peter Mandelson, on his first official visit to the United States since taking up his post last November, and the outgoing American Trade Representative, Robert Zoellick. On 11 January, the EU and the US made a commitment to conclude a bilateral agreement within three months, putting an end to State subsidies for builders of high-capacity aircraft, essentially Boeing and Airbus (see EUROPE of 12 January, p.8). This agreement aims to establish “conditions for fair competition” on the aeronautical market on both sides of the Atlantic, to be extended to other countries with a sizeable aeronautical industry, such as Japan. In an interview with Tuesday's Financial Times, Mr Mandelson said that he intended to work hard with his US counterparts to resolve the transatlantic trade dispute over subsidies to aircraft makers Boeing and Airbus, adding that these companies could not “continue indefinitely with uncertainty about the future”. However, he admitted that he was under “no illusions” about the difficulty of reaching agreement. “First we have to reach a common definition of subsidies and, having identified them and having agreed what things are allowable and not allowable, you then have to reach an outcome that offers fair competition between Boeing and Airbus”. As Mr Zoellick's spokesperson, Richard Mills, said on Tuesday, other bilateral issues such as American access to the EU rice market are on the agenda for discussions. Washington has threatened to increase customs duty on around 33 million dollars' worth of goods from the EU, especially mandarins and yoghurts, in return for the decision last year to increase customs duty on brown rice (see EUROPE of 1 February, p.12).
Furthermore, in the columns of the Times, Mandelson criticised the “insufficient leadership” of non-European governments which he felt could threaten the positive outcome of Doha Round negotiations. He calls on member of the WTO to pull together and “decide what they are prepared to put into the round and what they want to take out of it”.