Both Sides Are Talking

Airbus suddenly wants to know, why can't we all just get along?

The European maker of commercial aircraft has been locked in combat with Boeing over government subsidies. But now, it looks like Airbus may have blinked.

The EU and the US have been fighting the battle before the World Trade Organization. Both sides have accused the other of illegally paying for commercial aircraft research and both sides were talking tough going into WTO-mandated negotiations.

Now, there's suddenly a much kinder, gentler tone to the Europeans' statements on the trade talks.

"We are from the beginning looking for a compromise solution," European Commission President Jose Manuel Barroso told a news conference in Luxembourg. He was quoted by Reuters. "Our trade representative, the (European) trade commissioner Mr (Peter) Mandelson, is in contact with his American counterparts to find a solution and we very much would like to have that kind of solution."

It wasn't immediately clear what effect that sort of soothing talk had in Washington. American Trade Representative Robert Zoellick just last month warned Washington wouldn't sit on its hands for long before taking legal action against the EU and Airbus.

"It's quite obvious that in the future there will be some problems because of the globalization process we are all living in, there will be some problems between firms on both sides of the Atlantic and also in Europe itself," Barroso said at Monday's news conference. "There should be no contamination by a problem we have in the field of trade to other areas, to other political areas."

Boeing, which has been in close coordination with the Bush administration about its subsidy beef, says Airbus has accepted $15 billion in illegal subsidies. Airbus, on the other hand, says Boeing has accepted $23 billion in illegal subsidies in the form of tax breaks from local governments designed to lure Boeing manufacturing facilities to their towns.

The US threw down the gauntlet last fall, when it withdrew from a 1992 trade agreement covering aerospace firms. Experts have said they don't see a negotiated settlement in this case. Perhaps Airbus is trying now to prove them wrong.

FMI: www.boeing.com, www.airbus.com, www.wto.org