The European Union says there is still time to avoid a costly trade fight with the United States over subsidies to aircraft manufacturers, even though a critical deadline looms.

A European Union trade official (Simon Fraser, aide to EU Trade Commissioner Peter Mandelson) told reporters on Sunday that his side will not be first to press a new case at the World Trade Organization, and is willing to negotiate beyond today's (Monday's) deadline.

The United States sought WTO action last year, claiming that European governments were unfairly subsidizing development of the Airbus A380. The EU countered that the U.S.-based Boeing company got unfair subsidies for its new 787 Dreamliner.

The two sides later withdrew their cases to negotiate for three months, but the talks have stalled.

The United States has said it will go back to the WTO if Airbus asks for new subsidies.