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A U.S. - European trade war has been averted for now when both government officials agreed to talks aimed at cutting government subsidies.

"With this agreement, the EU and U.S. have confirmed their willingness to resolve the dispute which has arisen between them ... and to devote time and resources to doing so by negotiation rather than pursuing the dispute through WTO panels," stated European Union Trade Commissioner Peter Mandelson.

"During these negotiations, there would be both a subsidies standstill and a litigation standstill," commented U.S. Trade Representative Robert Zoellick. "Each side would refrain from taking additional steps in the WTO process and from committing to any new government supports for large commercial aircraft."

Boeing Chief Executive Harry Stonecipher stated, "We're pleased that the U.S. and the European Union have taken an important step toward ending subsidies to establish much-needed balance in the commercial aircraft market,"

"Trade wars never help anyone in international sales," said John Leahy, chief commercial officer of Toulouse, France-based Airbus. "I'm pleased to see that cooler heads have prevailed."

EU Ambassador to the US John Bruton sums it up from a political perspective, "The timing of this is very good because it improves the atmosphere ... just barely a month ahead of Bush's headline visit to the European Union," .

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