Europe has angered trading partners with its plan to make airlines cut pollution by levying a fee based on the amount of carbon emissions calculated for whole flights, not just the portion over Europe - a measure its critics regard as interference with their national airspace.

The head of the International Air Transport Association (IATA) said all parties shared the view that a global agreement was needed to head off the threat of a trade war over the EU's Emissions Trading Scheme ETS.L.

"Europe seems more committed to implementing its ETS unilaterally than to sincerely negotiating a multilateral agreement," IATA director general Tony Tyler told a gathering of 240 airlines in the Chinese capital.

"For Europe's international counterparts it's like being asked to negotiate with a gun to their head," he added in an opening speech to the group's annual meeting.

"Sustainability should unite the world with common purpose, not divide it with affronts to sovereignty that risk a trade war, a war that nobody wants and from which no winner can emerge."

China and India have ordered airlines not to cooperate with the scheme, raising the prospect of retaliation by the EU.

"The onus is now on Europe to seize the moment, take a credible action to defuse the situation and get on with finding the global solution that everybody is hoping for," Tyler said.

The EU says its plans are necessary as a way to meet international targets to reduce pollution, and that it was forced to act alone as a result of there having been little progress made towards reaching a global deal.

The airline industry fears being caught up in a trade war which would further dent profits that IATA says could be erased by a worsening of the European debt crisis.

(Reporting by Tim Hepher and Alison Leung; Editing by Daniel Magnowski)

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