The rhetoric is heating up between the U.S. and the European Union in the World Trade Organization battle over subsidies for large civil aircraft.

The U.S. Trade Representative’s office last week said it is calling on the WTO to establish a compliance panel to review the EU’s plan to remove non-compliant subsidies. The EU late last year submitted a compliance plan to remove alleged subsidies, but the U.S. and industry officials widely claimed the plan was inadequate.

The next step in the process, the establishment of a compliance panel, brings the dispute one step closer to sanctions, a WTO official says. Yet, the U.S. Trade Representatives office stopped short of using that term.

The EU blasted the U.S. request for a compliance panel. “We take note of the U.S. request to establish a compliance panel,” says EU Trade spokesman John Clancy. “We regret that the U.S. has chosen to take this step, since the EU notified its compliance with its WTO obligations in the package of steps taken at the end of 2011, and the U.S. has yet to do the same in the Boeing case,” he says.

The U.S. has not yet submitted a compliance plan for DS 353, the EU case against the EU, to which Clancy referred.

Both sides have said a negotiated settlement is preferable to sanctions. A settlement can occur at any point in the process, according to the WTO.