U.S. Seeks to Reopen Talks That Ended Airbus Dispute

WASHINGTON — The White House, escalating its nascent battle over government subsidies to Europe’s Airbus aircraft consortium, sought Thursday to reopen talks on a 1992 agreement that temporarily resolved the long-simmering dispute.

The announcement, which caught Europe by surprise and was described by one European as “very worrisome,” risked throwing the nation’s uneasy trade relations with some allies into confusion.

The move followed President Clinton’s criticism of the Airbus agreement this week and sent conflicting signals about the Administration’s readiness to cooperate with its major trading partners on the eve of a weekend meeting in London. The meeting is intended to introduce Clinton’s economic team--and his policies that aides say are aimed at greater international economic coordination--to the leading industrial democracies.

The Airbus agreement capped government subsidies for the development of larger airplanes and resolved a dispute over the interest rate applied to repayment of government assistance, among other things.

In calling for the new talks, the Administration was taking advantage of a clause in the Airbus agreement, completed last June after arduous international negotiations, that permits any party to the pact to seek “consultations” twice a year.

But those familiar with the agreement said the call for such talks, coming three days after Clinton’s speech raised serious concerns in Europe, suggested a “very threatening” approach on the part of the Administration.

Indeed, one day after Clinton spoke, Europeans began a vociferous round of complaints, raising the possibility of limiting airlines there in their purchases of American-made jetliners.

While the U.S. moves raise the possibility of upsetting ties with the European Community, they carry a strong political message in the United States, particularly for blue-collar workers. Although trade experts believe it would be nearly impossible to rewrite the Airbus agreement, the U.S. announcement creates the impression that Clinton is fighting back.