LexisNexis(TM) Academic - Document

LexisNexis(TM) Academic - Document
Copyright 2005 The Financial Times Limited
Financial Times (London, England)

April 5, 2005 Tuesday
London Edition 2

SECTION: INTERNATIONAL ECONOMY; Pg. 9

LENGTH: 415 words

HEADLINE: Zoellick leaves room for more talks with Brussels over aircraft subsidies

BYLINE: By RAPHAEL MINDER

DATELINE: BRUSSELS

BODY:


Robert Zoellick, the US deputy secretary of state, yesterday left the door open for further negotiations with the European Union over aircraft subsidies, but indicated that lack of recent progress meant the dispute was most likely to be resolved at the World Trade Organisation.

Sounding defiant, the former US trade representative raised the prospect of a WTO dispute settlement hearing to bring an end to the row over aid granted to Boeing and Airbus.

He said he had come to understand that the European Union was not "comfortable" with the idea of scrapping launch aid for Airbus, the European aircraft manufacturer, which has been Washington's main demand.

"The US and the EU both belong to the WTO," he said. "Now and then we are compelled to bring disputes (to the WTO)."

His two-day visit to Brussels comes before an April 11 deadline agreed in January, when both sides called a truce in the dispute on aircraft subsidies.

Mr Zoellick, who remains the US negotiator until at least April 11, said: "If need be, we're willing to continue the standstill beyond the 90-day period if the European Union can follow through on those core principles we agreed in January. But if not, that's what the (WTO) multilateral system is for."

Mr Zoellick also took an indirect swipe at Peter Mandelson, the EU trade commissioner, by stressing how he had successfully managed to resolve in the past other complicated trade disputes with Mr Mandelson's predecessor, Pascal Lamy.

The relationship between Mr Zoellick and Mr Mandelson soured last month following a heated phone conversation, which in effect brought the negotiations to a standstill.

Mr Zoellick, confirmed as number two at the State Department in February, met his new counterpart Benita Ferrero-Waldner, the EU's external rel-ations commissioner, rather than Mr Mandelson, who is touring the Middle East.

Ms Ferrero-Waldner said she had conveyed on behalf of Mr Mandelson his willingness to cont-inue "a two-phase approach" to help resolve the dis- pute.

This could see the EU agreeing to cut sign-ificantly the amount of aid offered to Airbus, as well the period for it to repay loans as part of an interim agreement.

However, Washington said it did not want to steer away from the initial goal, to end all subsidies, agreed in January.

Mr Zoellick also dismissed a warning from Mr Mandelson on Friday that the dispute could undermine efforts to make progress in the Doha round of world trade talks: "This . . . is not talk that I would subscribe to."

LOAD-DATE: April 4, 2005