The European Union on Thursday demanded that Washington explain more clearly how it subsidizes the Boeing Co. and warned it would counter any U.S. challenge targeting France-based Airbus SAS before the World Trade Organization.
After 41/2 hours of negotiations on the transatlantic dispute between the world's biggest aircraft makers, no clear progress was made beyond identifying stumbling blocks and a promise to keep contacts going in the weeks ahead, officials said.
U.S. negotiator John K. Veroneau called it a "useful and frank discussion" centering on finding ways to stop new subsidies to the aircraft producers as quickly as possible. He called on the E.U. "to join us in moving quickly toward that goal."
With the U.S. elections adding pressure, Washington has threatened to challenge the 25-nation E.U. before the WTO if the group continues to subsidize the European aircraft producer at the current rate.
"I don't think trade litigation suits anybody's interest. I don't think it would be in Boeing's interest," E.U. trade spokeswoman Arancha Gonzalez said after the meeting.
An E.U. official who declined to be identified said that if the U.S. administration were to make a challenge anyway, the retort would come quickly.
Boeing and Airbus compete in a wide range of civilian and military aircraft markets, and steadily over the past decade, Airbus has overtaken Boeing as the world's biggest aircraft manufacturer.
Both sides agreed in 1992 on a deal that limited subsidies to 33 percent of the production costs for new models.
Washington, however, contends that deal needs to be renegotiated, especially since Airbus has risen to become a global player taking market share from Boeing, which has cut 40,000 jobs over the past three years.
The E.U. would not object to such a renegotiation, but on its own terms.
"We are ready to discuss, but we want to be sure there is a level playing field," Gonzalez said. "We are not going to do anything which represents a unilateral move."
Both sides disagree what exactly constitutes subsidies, and the E.U. wants Washington to provide better information.
"We want to have a quantum leap in transparency provisions," Gonzalez said.
Boeing chief executive Harry C. Stonecipher said on the eve of the talks that it was time for European governments to stop giving Airbus "truckloads" of cash upfront for new airplane programs.
"We're saying enough is enough," he said. "You're very successful, you're delivering and selling more airplanes than Boeing. . . . Why don't you go to the bank and borrow money?"
European governments have said that Boeing's multibillion-dollar defense contracts, tax incentives and other perks also amount to huge subsidies.
Allegations of unfair subsidies for Airbus and Boeing have long been a feature of transatlantic trade relations.
For example, the United States complains that roughly one-third of the $13 billion cost of developing Airbus's A380 aircraft came from what Airbus calls "refundable launch aid."
In turn, the E.U. says Boeing has long enjoyed the benefits of the U.S. government's contracts in defense, space and transport. Also, in 2003, Washington state offered Boeing a $3.2 billion incentive package to secure the assembly plant for Boeing's new 7E7 Dreamliner.