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EEC, U.S. Talks on Airbus Seen Making Progress

December 11, 1987

BRUSSELS, Belgium (AP) _ Top European Economic Community and U.S. trade officials have made significant progress in talks to settle a dispute over Airbus Industrie subsidies, an EEC official said Friday.

Francoise Bail, a spokeswoman for the EEC Commission, said ″a great deal of work has been done″ to end the dispute, possibly early next year.

Talks Friday between U.S. Trade Representative Clayton Yeutter and EEC External Affairs Commissioner Willy De Clercq preceded the annual ministerial- level talks between the United States and the 12-nation trading bloc which open here Saturday.

Both EEC and U.S. officials anticipate the ministerial session will center on broad political and economic issues, rather than specific disputes.

The U.S. delegation, led by Secretary of State George P. Schultz, includes Agriculture Secretary Richard E. Lyng, Secretary of Commerce C. William Verity and Yeutter.

The EEC will be represented by president of the Community’s executive Commission Jacques Delors and its key members.

Bail said the bilateral preparatory talks were ″relaxed and friendly, in sharp contrast to the tensions that marked the meetings in prior years.″

Yeutter also commented on the conciliatory tone of the discussions, saying, ″despite some latent problems, the relations between the Community and the United States probably have never been better.″

The Airbus dispute centers on Washington’s contention that state aid to the four-nation consortium costs U.S. aircraft companies about $3 billion in lost sales each year.

The United States accused the consortium, which includes Britain, France, Spain and West Germany, of violating international trade agreements.

The EEC maintains, however, that U.S. companies, too, are subsidized, mainly through lucrative defense contracts.

Bail said the two sides agreed to hold a meeting of experts in early January and ″call a decisive ministerial meeting shortly thereafter.″

She cautioned, however, that ″we are not deluding ourselves about the difficulty of the work ahead.″

She said the top item on the Community’s agenda in Saturday’s talks would be the rise in the U.S. trade deficit. She said De Clercq expressed concern that this will increase pressure on the U.S. Congress to adopt protectionist legislation. Yeutter, she said, shared the same concern.

Among other issues discussed in the preliminary negotiations was the EEC ban on hormone-treated meat and strict European hygiene rules on slaughterhouses.

Both measures endanger more than $130 million worth of meat exports to Europe.

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