The WTO agreed yesterday to rule on the dispute between the US and the EU over billions of dollars in public aid for aircraft makers Boeing and Airbus.
The WTO's member states accepted a US request to set up a panel of experts to examine its complaint against aid by the governments of four European countries -- Britain, France, Germany and Spain -- for Airbus at a meeting here, a source close to the WTO and diplomats said.
The 148 members gathered in the Geneva-based WTO's Disputes Settlement Body also accepted a similar but separate EU challenge to US state and local subsidies or indirect assistance for Boeing, the source added.
Yesterday's moves, which were largely a formality, came about a month after the two nations had blocked each other's initial attempts to seek the intervention of the WTO.
The steps marked the failure of negotiations between Washington and Brussels to find common ground over several billion dollars of public aid, despite earlier warnings from both that a full-blown legal clash could be "disastrous."
"The EU regrets that the United States has chosen the path of litigation over that of negotiations," the EU's envoy said in a statement to the meeting.
However, the EU said there was still a possibility of talks between both sides.
"Communications channels with the US remain open," the European Commission's spokesman in Geneva, Fabian Delcros, told journalists.
Negotiations were not under way at the moment, he said.
The aircraft dispute is regarded as one of the biggest and the most complicated that the Geneva-based trade body has ever been asked to handle, and could last for years.
The long-running transatlantic tussle reached new heights in May after Airbus requested British government aid for its future A350 long-haul plane designed to compete with Boeing's new 787 Dreamliner.
The US argues that aid given to Airbus by its four top paymasters to launch a whole range of new aircraft is illegal under WTO rules.
European assistance sometimes "appear to be export subsidies", according to the complaint documents filed with the WTO.
Washington is also targeting support from the European Commission, the EU's executive arm, and EU member states for design and development, as well as for production facilities, and European Investment Bank loans for Airbus's new super-jumbo A380 aircraft.
The EU has countered by charging that support from US states and local authorities for Boeing, including tax breaks, financing arrangements and support for facilities, are "in blatant violation of the subsidies agreement," the EU envoy said.
Brussels is also targeting military contracts and support for space research given to US civil aircraft companies, as well as some federal support.
Both sides had consented to limited state assistance under a 1992 transatlantic accord that kept the simmering dispute in abeyance.
Rulings on the US and EU complaints are not expected before next year.
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