U.S. Sens. Maria Cantwell and Patty Murray are pushing for level playing field in the Air Force tanker contest.
The Senators from Washington, where the Boeing Co. would build its 767-based tankers, sent a letter to President Barack Obama, to make sure he heeds his own call to support American
businesses and workers. Obama emphasized that point during his State of the Union address on Tuesday.
“For too long American aerospace workers and the critical economic sector they represent have been disadvantaged by trade-distorting and illegal subsidies provided to their foreign competitors,” the Senators’ wrote.
Cantwell also joined Sen. Jerry Moran, R-Kans., in sponsoring a bill to force the Pentagon to take into account illegal subsidies in the U.S. Air Force contest, which pits Boeing against EADS, the parent company of Airbus.
Airbus and Boeing have complaints pending with the World Trade Organization, alleging that the other received unfair subsidies from their respective governments. The WTO could hand down its final report on the matter Monday.
The Air Force is expected to name a winner in the $35 tanker contest early this year.
Here’s Cantwell and Murray’s letter to Obama:
January 26, 2011
President Barack Obama
The White House
1600 Pennsylvania Avenue, N.W.
Washington, D.C. 20500
Dear Mr. President:
In your State of the Union address you spoke of the importance of keeping America competitive in an era of globalization. We strongly agree. No one is more productive than the American worker, and we have confidence that the American worker will succeed in the global marketplace if the playing field is level. But for too long American aerospace workers and the critical economic sector they represent have been disadvantaged by trade-distorting and illegal subsidies provided to their foreign competitors. We believe that the U.S. government must act toughly and tirelessly to ensure that jobs here at home are not lost because of an unfair competitive disadvantage in the world economy.
As part of this strategy, it is critical that U.S government policy be consistent across all federal agencies. Foreign governments or companies should not be rewarded for products that benefited through the use of illegal subsidies or for disregarding international standards. In the case of subsidies provided to Airbus by European governments, however, there is a gap in government policy that puts the American worker at a competitive disadvantage and could cause further harm to the domestic aerospace industry.
The World Trade Organization issued a final ruling on June 30, 2010, finding that illegal subsidies have caused serious damage to America’s aerospace industry, workers and economy. The cumulative market value of these subsidies approaches $200 billion in today’s dollars. Your U.S. Trade Representative – Ambassador Ron Kirk – has stated that these subsidies “caused adverse effects to the interests of the United States.” Yet the Department of Defense has indicated that it will not take the illegal subsidies into account in its KC-X source selection for the next generation of aerial refueling tankers.
We believe that the U.S. government must establish a consistent policy across all government agencies that takes into account the effect of illegal subsidies on bids for government contracts such as the KC-X award. Such a policy would fit naturally into the pro-competiveness agenda you outlined in your State of the Union Address. We look forward to working with you to grow the American economy by allowing American workers to compete on an even playing field.
Sincerely,
Senator Patty Murray (D-WA)
Senator Maria Cantwell (D-WA)
Senator Pat Roberts (R-KS)
Senator Jerry Moran (R-KS)
Senator Roy Blunt (R-MO)
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