US and EU negotiators traded arguments on Thursday over state aid for aircraft rivals Airbus and Boeing, remaining far apart on a sensitive issue that has gathered steam in the run-up to US presidential elections.
Washington insisted that its 1992 pact with the European Union, which limits subsidies for the two aircraft manufacturers, should be ripped up and replaced by a new agreement that would forbid any support in the future.
But the European Union countered that it would be hard to sell such a deal to Airbus just when Boeing has received "massive support" for its 7E7 aircraft.
"What has been agreed is that we will go back and brief our respective constituencies and then take contact in coming weeks which course of action we should take," said European Commission spokeswoman Arancha Gonzalez.
"I'd say we are no further apart than yesterday evening," she told reporters after 4-1/2 hours of talks in Brussels, adding no date had been fixed for further discussions on an issue that fuels strong feelings on both sides of the Atlantic.
US President George W. Bush, campaigning for reelection in November, has warned that without a new pact banning support, his administration may bring a World Trade Organisation (WTO) case against the aircraft "launch aid" enjoyed by Airbus.
"Given the market parity between Boeing and Airbus, the US believes that now is the time to bring an end to any new subsidies for the development or production of large commercial aircraft," John Veroneau, general counsel of the Office of the US Trade Representative, said in a statement.
"We explained to the European Commission officials why we believe now is the time to end subsidies and asked them to join us in moving quickly toward that goal."
The EU says it is ready to rework the 1992 agreement, which allows governments to provide repayable loans covering up to 33 percent of Airbus's estimated cost of developing new models.
But it insists that any cut in its support programme for Airbus must be matched by a reduction in indirect subsidies that Boeing receives through US government-financed research and development programmes for military and space projects.
"We are not going to take any commitment that means a unilateral disarmament on our part if there is no similar move on the other side," Gonzalez said.
The United States argues that the intent of the original agreement had been to help support Airbus against a more mature competitor, and now that the but now the "infant is a full-grown adult".
Airbus is co-owned by European aerospace company EADS and Britain's BAE Systems.
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