Brussels, 04/04/2005 (Agence Europe) - The American deputy Secretary of State, Robert Zoellick, confirmed on Monday that the United States was prepared to extend bilateral negotiations with the EU on the ban on State aid to Airbus and Boeing beyond 11 April if necessary (when the first three-month deadline, which was set in January, expires), but also stressed that Washington would not hesitate to relaunch its litigation with the World Trade Organisation (WTO) if negotiations remained fruitless. “If necessary, we are prepared to extend the 'stand-still' period beyond the ninety days [decided on 11 January] if the European Union is prepared to stick to the core principles we agreed to in January”, Mr Zoellick told the press after his meeting with the Commissioner for External Relations, Benita Ferrero-Waldner. However, if this does not prove to be the case, the United States would bring the case back before the WTO, which has demonstrated in recent years that it is capable of resolving even “pretty tough” disputes, such as that over steel. The United States does not feel that this kind of procedure before the WTO will necessarily have a negative impact on continuing negotiations on the Doha Round, Zoellick stressed. If the European side is to succeed in bringing the bilateral talks to a conclusion, then it must show “political goodwill” in removing State aid, including start-up aid, he insisted. Earlier that day, in a lightening trip to Tallinn, Mr Zoellick had already repeated the American position on State aid to the aviation sector, stressing that there would be little leeway before the cut-off date for talks, 11 April. “We feel that it is time to put an end to subsidies to high-capacity commercial aircraft”, he said. “Under WTO definitions, start-up aid is clearly classed as a subsidy”, Zoellick averred. On Friday, Commissioner Peter Mandelson (Trade) said that asking the WTO to rule on the issue would be a mistake. Stating his point of view in the Washington Post, Mr Mandelson pleaded for a resolution to the dispute outside the WTO dispute settlement mechanisms, because “a case of this size would swamp the system, would inevitably lead to transatlantic political tension and the two airlines [Airbus and Boeing] would have to go about their business in a climate of prolonged uncertainty as to the result”. Washington refuted this point of view. “We strongly disagree with the view that the WTO is not the right body to resolve this matter. The Airbus-Boeing dispute is exactly what the WTO was created for”, said Richard Mills, spokesperson to the American Trade Representative. “The heart of the matter remains the same: is the EU prepared to put an end to start-up aid and to allow Airbus and Boeing to compete under normal trade conditions?”
Mr Zoellick and Ms Ferrero-Waldner also discussed American fears at the possibility that the European embargo on arms exports to China could be lifted. Speaking to the press, Mr Zoellick emphasised the “possible dangers” such a system could hold for future transatlantic cooperation in terms of defence and the sales of military equipment between the US and Europe. In Riga (Latvia) on Sunday, Zoellick said that the lifting of the European embargo on arms sales to China would affect sales of military equipment between the EU and the US. “This would certainly affect transatlantic trade in defence because the kinds of arrangements we have had with defence groups in Europe would be turned on their heads”, he explained. “I feel that this would hinder many of the opportunities and integration we have seen grow up”, he added. Could the dispute between the EU and the US on arms sales to China even go as far as harming transatlantic commercial relations overall? “The United States and the European Union have very strong commercial relations, and we hope that this continues, also to be successful with multilateral negotiations on the Doha development agenda (…). We try to be frank and open about the dangers [related to the matter of the export of arms to China], but we do not want to expand problems even further”, Zoellick stressed on Monday after his interview with Ms Ferrero-Waldner. In the evening, the American deputy Secretary of State was to meet the vice-president of the European Commission, Günter Verheugen.
Mr Zoellick will end his European tour (which has taken him to fourteen countries in nine days: Bulgaria, Czech Republic, Denmark, Estonia, Belgium, Greece, Hungary, Iceland, Latvia, Netherlands, Portugal, Romania, Slovenia and Spain) on Tuesday with an exchange of views (behind closed doors) with the committee on foreign affairs of the European Parliament.