The top EU trade official said that Washington had a "false perception" of how aircraft manufacturer Airbus is funded but added that talks with US authorities to settle a row over government assistance to both Airbus and US rival Boeing could start early next year.
"I hope talks will be achievable in the early part of next year, sometime during January," European Union Trade Commissioner Peter Mandelson said following a tour of the Airbus production facility here.
"I believe it is possible to find a negotiated resolution. One thing I'm clear about, it will either be negotiation or litigation, but we're not going to do both. There will be a choice to be made," he said.
The United States and the European Union agreed earlier this month to allow more time for discussions to settle their differences but warned that arbitration by the World Trade Organization remained an option.
The United States contends that Europe's Airbus Industrie has benefited from government subsidies that violate international trade rules. The EU for its part maintains that it is Boeing that has received illegal susbsidies in the form of big contracts from US defense and space agencies.
US and EU officials had been required to decide by December 6 whether to ask the World Trade Organization to name a panel to resolve the dispute or to carry on with discussions among themselves.
"The Airbus's expanding market share is clearly exerting pressure on competitors and I think is the main driver of the dispute between Airbus and Boeing," Mandelson said.
He attributed much of the US argument to an inaccurate view of funding procedures for Airbus.
"There is an issue of false perception on the American side," he argued.
"Just because Airbus is a formidable competitor does not mean that it is unfairly subsidized. The world market is big enough for two strong successful competitive companies ...
"This is not some inferior product that has to be propped up by state subsidies. In reality, the Airbus company repays more to European governments than it receives. In other words, European member states themselves are making a profit on their loans to Airbus."
He maintained that a decision announced Friday by Airbus owners EADS and BAE Systems to launch a new plane, the A350, to challenge the future Boeing 7E7 "can only be viewed as a provocation by a rival who doesn't like competition."
"But this market needs competition. We shouldn't leave it only to one company."
Airbus is 80 percent owned by the European Aeronautic Defence and Space Company and 20 percent by British group BAE Systems
By: N. Peter Kramer
