U.S. trade chief encouraged by European 'signals' over aircraft subsidies

Britain's International Trade Secretary Liz Truss arrives at Downing Street in London, Britain February 11, 2020. REUTERS/Hannah McKay

WASHINGTON, May 5 (Reuters) - U.S. Trade Representative Katherine Tai said on Wednesday she was encouraged by her conversations with European officials about ending a 16-year dispute over aircraft subsidies, and both sides were serious about reaching an agreement.

Tai said Washington's decision to suspend tariffs imposed as a result of World Trade Organization rulings - a move matched by the EU and Britain - reflected the "seriousness" of the drive to settle the longstanding row about government aid provided to U.S. planemaker Boeing (BA.N) and Europe's Airbus (AIR.PA).

"Our sense of motivation is being received across the Atlantic," Tai told an online event hosted by the Financial Times. "I am getting signals back that there's a serious motivation and intent on the other side. Let's see what we're able to accomplish."

Tai said resolving the issue would be important for the future of ties between the United States and European Union, which are also at odds over tariffs on steel and aluminum.

Senior British and EU officials have recently expressed hope that the issue could be settled in coming months.

Liz Truss, trade minister of Britain which is party to the talks as a former EU member and maker of Airbus components, told Reuters she expects the trade dispute to be resolved by July when the freeze on tit-for-tat tariffs expires. read more

The parties agreed in March to suspend retaliatory tariffs on goods such as Scotch whisky for four months to give negotiations in the long-running row a chance. read more

Truss said the two sides were working on the details of a draft text of an agreement, with the negotiations focused on "subsidy disciplines" in the aerospace industry.

Reporting by Andrea Shalal and David Lawder Editing by Peter Graff

Our Standards: The Thomson Reuters Trust Principles.