The United States will press the European Union to negotiate a new civil aircraft agreement that would put a stop to subsidies for rivals Airbus and Boeing in the future, a senior US official said on Wednesday.
"Our preferred course, without question, is a negotiated settlement," General Counsel John Veroneau, a senior official in the US trade representative's office, told reporters.
US President George W. Bush has threatened to bring a World Trade Organisation (WTO) case against the "launch aid" provided for Europe's aircraft manufacturer.
But Veroneau, who will meet EU officials in Brussels on Thursday to discuss the highly sensitive issue, said Washington would prefer to establish a new pact on subsidies which would replace an agreement struck in 1992.
"We may end up there (at the WTO) but I think it would be better for both sides ... that we should agree that now is the right time to bring an end to these government supports," he said.
He denied charges that the US case was being made for political purposes in the midst of campaigning for November's presidential election.
He said that if the United States went to the WTO it would pursue "existing and past subsidies", whereas an agreement now would allow previous aid packages already in place to continue.
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