UPDATE 2-Europe accuses U.S. of failing to cut Boeing aid


* U.S. said in September it had removed subsidies to Boeing

* EU says Boeing unfairly assisted by gov't research deals

(Adds comment from Airbus)

BRUSSELS, Oct 11 (Reuters) - The European Union accused theUnited States on Thursday of ignoring a World Trade Organisationinstruction to stop subsidising planemaker Boeing andasked the WTO to investigate, prolonging the world's biggesttrade dispute.

The United States said last month it had complied with anorder to withdraw subsidies to Boeing after the WTO found inMarch that the U.S. planemaker had received billions of dollarsin unfair aid.

But the European Commission, the EU's executive, saidWashington had shown no proof that it had complied.

"It is now clear for the European Union that the UnitedStates has not only failed to properly implement the decision ofthe WTO but it has even provided new subsidies to Boeing," theCommission said in a statement.

The Commission said U.S. subsidies were costing Europeanaerospace companies billions of euros in lost revenue. RecentU.S.-EU talks failed to resolve this dispute, the Commissionsaid.

"The U.S. claimed to have removed (the subsidies), butprovided no detailed evidence to support its claims," it said.

The U.S. Trade Representative's office said the UnitedStates had met a deadline to comply with the WTO's findings. Thecase, brought by the European Union, was a response to a claimlaunched by the United States more than seven years ago.

Brussels says Boeing is unfairly assisted by governmentresearch deals and other federal and local measures.

The WTO has also ruled against European support to Airbus,which is owned by EADS , in which the French governmenthas a stake and the German government has influence via aholding owned by Daimler .

The United States and the European Union disagree over theruling against subsidies to Airbus, which the United States saysfar outstrip any U.S. government support for Boeing.

"Instead of bringing into compliance the massive illegalsubsidies that Boeing has received in the past and continues toreceive from U.S. federal and state governments ... Boeing hasneither paid back nor eliminated the illegal subsidies," said aspokeswoman for Airbus.

The United States has also accused the European Union ofignoring WTO decisions and is threatening up to $10 billion insanctions.

However, most observers expect the two sides eventually tonegotiate a settlement.

(Reporting by Robin Emmott; Editing by Kevin Liffey)

((robin.emmott@thomsonreuters.com)(+32 2 287 6835)(ReutersMessaging: robin.emmott.thomsonreuters.com@reuters.net))

Keywords: EU US/BOEING