Published: Thursday, September 17, 2009
WTO ruling’s effect on Boeing-Airbus tanker contest debated
EVERETT — While Boeing Co. supporters argue that a recent trade ruling should sway the upcoming Air Force tanker contest, others say doing so would violate international agreements.
“It would be a grave mistake, with severe consequences to both our economy and trade relations, to use a preliminary (World Trade Organization) report as justification for restricting the ability of our military to procure the best equipment possible,” wrote Sen. Richard Shelby, R-Ala., in a letter to Defense Secretary Robert Gates on Wednesday.
The World Trade Organization recently issued a confidential preliminary ruling on a dispute between jet makers the Boeing Co. and Airbus over illegal subsidies. Boeing advocates who were briefed on the matter say the trade group sided largely with the Chicago-based aerospace company. Boeing is competing against Airbus’ parent company, EADS and its partner Northrop Grumman, for a $35 billion Air Force tanker contract.
“This WTO ruling confirms what U.S. officials have been saying for years: European nations have provided Airbus with illegal subsidies that directly harm the American aerospace industry and American workers,” wrote Rep. Rick Larsen, D-Wash., in a recent letter, signed by 47 members of Congress, to President Barack Obama.
Larsen and Sen. Patty Murray both represent Washington state, where Boeing employs about 73,600 workers, many of whom would work on the company’s aerial refueling tanker, should the Air Force select Boeing’s offering. Murray also sent the president a letter recently, urging him to “take the strongest possible actions allowed for under the WTO against the European Union in order to ensure a level playing field for the American aerospace industry and its workers.”
But Shelby, whose state of Alabama would benefit should the Air Force pick the tanker offered by Northrop and EADS, calls Larsen and Murray’s efforts “vigilante justice.”
As a World Trade Organization member nation, the United States already has agreed not to act on preliminary rulings issued by the group. The ruling likely will be appealed by the European Union, meaning it won’t be finalized potentially for several years, Shelby wrote. The United States would be violating international agreements should the Air Force penalize Northrop and EADS in the tanker contest, he said.
The Air Force is expected to release a draft of its tanker requirements this month, likely announcing a winner next year. It’s the Pentagon’s second effort in eight years to replace its fleet of KC-135 tankers.
“It would be a grave mistake, with severe consequences to both our economy and trade relations, to use a preliminary (World Trade Organization) report as justification for restricting the ability of our military to procure the best equipment possible,” wrote Sen. Richard Shelby, R-Ala., in a letter to Defense Secretary Robert Gates on Wednesday.
The World Trade Organization recently issued a confidential preliminary ruling on a dispute between jet makers the Boeing Co. and Airbus over illegal subsidies. Boeing advocates who were briefed on the matter say the trade group sided largely with the Chicago-based aerospace company. Boeing is competing against Airbus’ parent company, EADS and its partner Northrop Grumman, for a $35 billion Air Force tanker contract.
“This WTO ruling confirms what U.S. officials have been saying for years: European nations have provided Airbus with illegal subsidies that directly harm the American aerospace industry and American workers,” wrote Rep. Rick Larsen, D-Wash., in a recent letter, signed by 47 members of Congress, to President Barack Obama.
Larsen and Sen. Patty Murray both represent Washington state, where Boeing employs about 73,600 workers, many of whom would work on the company’s aerial refueling tanker, should the Air Force select Boeing’s offering. Murray also sent the president a letter recently, urging him to “take the strongest possible actions allowed for under the WTO against the European Union in order to ensure a level playing field for the American aerospace industry and its workers.”
But Shelby, whose state of Alabama would benefit should the Air Force pick the tanker offered by Northrop and EADS, calls Larsen and Murray’s efforts “vigilante justice.”
As a World Trade Organization member nation, the United States already has agreed not to act on preliminary rulings issued by the group. The ruling likely will be appealed by the European Union, meaning it won’t be finalized potentially for several years, Shelby wrote. The United States would be violating international agreements should the Air Force penalize Northrop and EADS in the tanker contest, he said.
The Air Force is expected to release a draft of its tanker requirements this month, likely announcing a winner next year. It’s the Pentagon’s second effort in eight years to replace its fleet of KC-135 tankers.
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