Comments Come A Week After US Threatens To File Complaint About Airbus Subsidies

If Peter Mandelson has his way, there will be no trade war between the US and Europe -- at least, not over Airbus subsidies.

Mandelson (right), the newly-designated EU trade commissioner, promised to dive into the controversy head-first to avoid an all-out hissy-fit between Boeing supporters and those who back Airbus. The US says loans from France and Germany have made Airbus into the world's biggest manufacturer of commercial aircraft. Last week, President Bush threatened to file a complaint about the subsidies with the World Trade Organization.

"I think we can avoid a trade war," Mandelson said Friday. He was quoted in the Seattle Times. "We should talk about these matters — talk across the table and not through megaphones."

President Bush's threat came in the midst of an election campaign where he's trying to woo Boeing workers -- and every other voter in the state of Washington, where Boeing still has a massive presence. Bush lost that state in 2000.

In a campaign visit to Seattle last Friday, Bush said US trade representative Bob Zoellick will tell EU officials next month that the Airbus subsidies are "unfair." The president continued, saying "He should pursue all options to end these subsidies, including bringing a WTO case if need be."

"I've been around long enough and know America well enough to discount some of what is said in an American presidential election year. So I think the best judgment will be applied after November," Mandelson told the Times after hearing of Bush's comments.

The way the US supports Boeing and Europe supports Airbus is governed by a 1992 agreement that the Bush administration calls outdated. The US wants a ban on all "new subsidies."

FMI: www.europa.eu.int/comm/trade/index_en.htm