Talks on subsidies fail to end dispute

TALKS between top European Community and US officials about aircraft industry subsidies have ended without agreement.

Bitterness between the two rival aircraft manufacturers, Boeing of the US and Airbus Industrie of Europe, seems still to be rife.

This week, Airbus called on Boeing not to make ''denigratory statements'' about the consortium while representatives of the European Commission and US Government were meeting in Brussels to review the workings of last year's agreement on government support to the civil aviation industry.

Mr Jean Pierson, Airbus' chief executive, claimed that Boeing had been attempting to influence the outcome of talks through a campaign of ''innuendo, defamatory remarks and contradictory statements''.

It had been hoped that officials would be able this coming week to clear up the bickering about the implementation of the July 1992 accord to curb aircraft subsidies on both sides of the Atlantic.

US President Bill Clinton has repeatedly accused Airbus of competing unfairly against Boeing and McDonnell Douglas, claiming the group was subsidised by European governments.

But Airbus claims it is not subsidised, but was set up with government loans that are now being repaid with interest. It has hit back with accusations against Boeing.

The subsidies accord signed last year sets a 33 per cent limit on direct government aid for aircraft development costs and a three per cent limit on indirect aid.

Following the talks, a top EC official said he was disappointed that Washington had failed to provide figures for levels of indirect aid to US aircraft makers.

The EC had expressed concern that the US would not be able to meet its commitment to keep levels of indirect aid below three per cent of civil manufacturing sales, the official said.

European indirect aid to Airbus amounted to about US$100 million, he said.

But a US official said the EC ''methodology'' was questionable and accused the 12-nation trade bloc of posturing.

It is now hoped that there will be another meeting.

Mr Pierson this week criticised Boeing's corporate vice-president for planning and international development, Mr Lawrence Clarkson.

He referred to Mr Clarkson's testimony to the US House Committee of Public Works and Transportation sub-committee on aviation at a hearing in Washington last month.

Mr Clarkson said then: ''Even with the downturn in aircraft orders and deliveries, Airbus is not reducing its production rates.'' Mr Pierson said Airbus had scaled down production of all its aircraft ranges in several steps, anticipating the market downturn that began in October 1990. During the same time, Boeing had announced increases in production of its 737, 747 and 757 models,Mr Pierson said.