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UPDATE 1-German ambassador to U.S. urges quick resolution of aircraft subsidy dispute

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WASHINGTON, Dec 16 (Reuters) - Germany’s ambassador to the United States on Wednesday called for quick action to resolve a U.S.-European dispute over aircraft subsidies, calling it a distraction from bigger issues such as climate change and the pandemic that require joint action by the historic allies.

Emily Haber told an online event hosted by the embassy it was important to settle the long-standing dispute given the harmful impact of the coronavirus pandemic on aircraft manufacturers in both regions and moves by China to rapidly develop its own commercial aircraft.

“It is one of the issues that needs to be solved very early on,” Haber said, underscoring the need to “get the priorities right, especially at a time when aircraft industries are really suffering from the consequences of the pandemic.”

Failure of Europe and the United States to resolve this relatively minor issue would send a clear signal to China, Russia and other countries about the ability of the historic allies to work together on other, larger issues, she said.

“These are minor irritants in the face of the larger picture,” Haber said, underscoring the need to focus on long-term structural opportunities to shape joint positions on the pandemic, the tech economy, climate change and trade.

Haber’s remarks come amid intensive talks between Washington and Brussels about ending the 16-year-old trade dispute over government subsidies to Europe’s Airbus, which is politically backed by Britain, France, Germany and Spain, and U.S. planemaker Boeing.

Haber noted that China’s strategy was to divide democracies, as evidenced by its dealing with Australia.

“They’re trying to pit us against each other,” she said. “But if we want to shape an alliance in order to confront this behavior ... the obvious answer is we have to create a common ground which is as large as possible.” (Reporting by Andrea Shalal; editing by Rosalba O’Brien and Jonathan Oatis)

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