Europe and the United States could be headed for a trans-Atlantic trade war over the issue of government aid to Airbus and The Boeing Co. after the two sides failed to reach an agreement yesterday on how to resolve the dispute.
After a meeting in Washington, D.C., between U.S. and EU representatives, both sides agreed that it is unlikely that a 1992 bilateral agreement that allows Airbus to receive government loans to develop new jets will be renegotiated, as the United States has demanded.
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Airbus argues that is not a subsidy but a repayable loan with interest.
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The EU has said it is willing to renegotiate the 1992 agreement, but any new accord must address the issue of indirect government support for Boeing, such as research and development money from NASA and the defense department that Airbus says spills over into benefits for Boeing's commercial business.
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