EU Warns Of Trade War With US

(AP)  European Union trade chief Peter Mandelson said Tuesday that the EU will file a counter complaint at the World Trade Organization claiming Boeing Co. receives illegal aid, launching new trade war with Washington.

The move reactivates a legal process at the WTO that was frozen by the EU when it entered negotiations with Washington in January to try to cut aid to U.S.-based Boeing and its European rival Airbus. It is also a reaction to Washington's decision late Monday to abandon months of talks and take the EU to a legal panel at the WTO over Airbus subsidies.

"I can assure you Europe's interests will be fully defended," Mandelson said, adding that he was "disappointed that the United States has chosen this confrontation with Europe."

Mandelson blamed the United States for escalating the dispute into a full-blown trade war.

"America's decision will, I fear, spark the biggest, most difficult and costly legal dispute in the WTO's history," he said, adding it would be "manifestly expensive and (involve) quite destructive litigation."

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