US President, Mr Clinton, threatened yesterday to go to the World Trade Organisation or impose sanctions on Europe if it blocked the Boeing-McDonnell Douglas merger, but said a trade war could "probably" be avoided.

"We have a system for managing this through the World Trade Organisation and we have some options ourselves when actions are taken by Europe in this regard," he said.

Nonetheless, Mr Clinton said he believed a trade war could be avoided.

"There's an orderly process for our handling this and I think we'd better let the orderly process play itself out before we talk ourselves into a trade war," Mr Clinton said. "I think we're a long way from that and I think we'll probably avoid it."

The European Commission votes next Wednesday on the proposed $14 billion (£7 billion) merger of Boeing and McDonnell Douglas. Although the EU has strongly suggested it would vote to block the merger, it has left the door open to last-minute negotiations with Boeing.

At issue are very different views of the merger in Europe and the US.

Europeans say the merger would create an unfair competitor for Airbus Industrie, narrowing the number of large commercial airplane companies in the world from three to two.

They characterise the issue as one of antitrust or, as it is called in Europe, competition.

Members of Congress note that the Federal Trade Commission in the United States, which handles antitrust issues, approved the merger. They say this is a trade issue, all about protecting Airbus.

Mr Clinton backed the congressional view, noting it "would be unfortunate if we had a trade stand-off" with the Europeans.

"I'm concerned about what appear to be the reasons for the objection to the Boeing-McDonnell Douglas merger by the European Union," Mr Clinton said.

"The Europeans have more people living in their continent than we do in the United States and I don't believe Airbus has an effective competitor in Europe," he said.

A White House official said later that Mr Clinton "made it clear that American businesses need to be treated fairly".

The increasing pressure from the United States prompted an expression of concern from French President Jacques Chirac, who said he feared US pressure on individual members of the EU might have an effect. - (Reuter)