The EU and US moved closer to an aviation trade war after failing to reach agreement during talks Thursday on subsidies to Airbus Industrie.
The US said it might now pursue a threat by President George W. Bush to take a case to the World Trade Organization over the subsidies following talks between US Trade Representative Robert Zoellick and EU Trade Commissioner Pascal Lamy.
Subsidies have been allowed under a 1992 accord.
Hopes of renegotiating the 1992 accord are now "dwindling," said a European Commission spokesman in Washington, Anthony Gooch, following the talks between Zoellick and Lamy.
"It actually now looks as if that would be quite difficult to achieve," Gooch said. "It is now looking like it's a very long shot."
Zoellick said through a spokesman that "the status quo is unacceptable. We believe a new agreement is needed that creates a level playing field and ends the unfair support that Airbus receives from launch aid.
"As [Bush] has said, we think these subsidies are unfair and we will pursue all options to end these subsidies -- including bringing a WTO case, if need be," Zoellick said.
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