France and Germany have reached an agreement on the next steps in a joint program to design a next-generation combat jet, French Defence Minister Florence Parly said on Tuesday.

The jet, due to go into service in 2040, is expected to replace the Rafale, built by France’s Dassault Aviation, and Germany’s Eurofighters, made by a European consortium.

Parly said on Twitter that the agreement included the planned launch of a prototype or demonstrator of both the aircraft and the engine by the middle of next year.

“Decisive step today with the agreement to start the architecture and design studies and the launch of demonstrators (aircraft and engine) by mid-2019,” Parly tweeted. “It is advancing.”

Germany and France signed a memorandum of understanding in April and agreed that France would take the lead. The two governments have been at odds about future exports, while the companies involved are fighting over leadership of the system to integrate the jet with drones and other weapons.

Dassault and Airbus will shortly submit an unsolicited proposal for initial conceptual work on the new fighter jet to German and French officials, sources familiar with the matter told Reuters last week.

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