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Last Updated: Monday, 30 May, 2005, 19:37 GMT 20:37 UK
EU makes fresh offer in plane row
Peter Mandelson in the Airbus plant
Mr Mandelson says both sides need to scale back subsidies
Europe has made a new offer to the United States to cut state aid as a means of resolving a long-running dispute over subsidies for planemakers.

Trade commissioner Peter Mandelson has proposed that both sides cut part of their subsidies to Airbus and Boeing and discuss further aid cuts later.

The proposal is "more specific" than previous offers, the European Commission said.

In return, the US accused Brussels of "spinning to the press".

Neither side was supposed to be making their proposals public, according to a statement from the US.

"We had an agreement with the Europeans that each side would quietly reflect ... over the weekend," said US trade representative Richard Mills.

In response, Airbus shareholders EADS and BAE Systems said that the US statement cast serious doubt "on the interest of the US for a negotiated outcome."

'Unfair support'

Brussels and Washington have been in talks since January on the issue.

Each side has accused the other of distorting the world market for aircraft by unfairly supporting their national manufacturers.

So far, the row has not been taken to the World Trade Organisation, but an escalation has not been ruled out.

According to one report, Brussels has offered to cut aid for the Airbus A350 mid-sized jet by up to 30%.

The A350 project is supposed to cost $3bn, some one-third of which is likely to have to come from European governments.

Mr Mandelson expects a formal response from the US Trade Representative within days.


SEE ALSO:
Franco-German dispute hits Airbus
12 May 05 |  Business
EU and US hopes over aircraft row
02 May 05 |  Business
Airbus sales help EADS fly higher
09 Mar 05 |  Business


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