Accusations, exaggerations and thinly veiled threats are leading commodities in the politically charged arena of international trade. They’ve been in ample supply this month in the multi-front competition between Boeing and its chief rival, Europe-based EADS — the parent company of Airbus.
Such exchanges are all about posturing, so distorting reality is part of the game. Fear of appearing hypocritical never stands in the way.
Take, for example, this comment from French President Nicolas Sarkozy, complaining about a lack of fairness after EADS’s U.S. partner, Northrop Grumman, walked away from the competition to build the next generation of refueling tankers for the U.S. Air Force.
“If they (the United States) want to be heard in the fight against protectionism, they should not set the example of protectionism.”
This in defense of a firm that on Tuesday the World Trade Organization ruled has received illegal subsidies from European governments to develop new jetliners that compete with Boeing’s — including the A330, on which EADS’s tanker is based.
And from the leader of a nation whose military procurement procedures are nowhere near as open as the United States’. Aerospace analyst Richard Aboulafia of the Teal Group asked this rhetorical question in a recent Web posting: “Is there any way, under any possible circumstances, that the French Air Force would be allowed to consider a Boeing tanker?” It wouldn’t, as long as a domestic supplier could do the job.
Sarkozy and others high in the French government imply that the Pentagon stacked the deck against Northrop-EADS in the tanker bidding by crafting specs that favored Boeing’s smaller, 767 airframe. But does that translate to protectionism? Maybe the KC-767 has an edge because it better fits the Air Force’s operational needs, is more cost-effective and is backed by more than a half-century of experience Boeing has building tankers.
Now EADS is asking the Pentagon to extend the May deadline for bidding on the tanker so it can submit a bid on its own. Call us protectionist, but it seems pertinent to ask whether it’s wise to have a foreign entity act as prime contractor on such an important and sensitive U.S. military project. Recent rumors that a Russian firm wanted to bid on the tanker, which were later denied, added an even dicier angle to the question.
Aboulafia argues the U.S. is well-served by its procurement policies, and that it should fully consider Airbus planes for the next phase of tanker bidding.
We won’t hold our breath for the French to adopt that kind of openness.