SEATTLE, Aug 14: US President George W. Bush warned on Friday that the United States may bring WTO action in September against Airbus Industrie, citing "unfair" government subsidies to the European aircraft maker.

"I've instructed US Trade Representative Bob Zoellick to inform European officials in his September meeting that we think these subsidies are unfair and that he should pursue all options to end these subsidies - including bringing a WTO case, if need be," Mr Bush said.

The president's election-year threat to go to the World Trade Organization came after he met behind closed doors here with workers at Boeing, Airbus' archrival, during a campaign swing.

"Airbus was founded about 30 years ago and has received, in those 30 years, large government subsidies from European nations, and continues to receive them," said Mr Bush.

"I think it's unfair to this American company that these European governments continue to subsidize Airbus," said Mr Bush. "I believe if our country is treated fairly, we can compete with anybody, anytime, anywhere."

Under a 1992 US-European Union agreement, European support for new aircraft programmes - provided in royalty-based loans - was limited to 33 per cent of the total cost, repayable with interest within 17 years.

On the other hand, indirect US support through NASA or military programmes was limited to three percent of turnover for the US large commercial aircraft industry.

Boeing has charged that the arrangement allows Airbus to get state money virtually on demand.

"We believe in free trade. We want that free trade to be fair, as well. And getting rid of the subsidies of Airbus will make the trade fair, will make the playing field level" said Mr Bush.

Mr Zoellick has recently stepped up pressure for an overhaul of the 1992 deal, telling reporters at a news conference July 8 that the agreement was outdated.

Airbus is jointly owned by the European Aeronautic Defence and Space Co, which holds 80 per cent, and Britain's BAE Systems, which holds the remaining 20 per cent.-AFP