Texas Insider Report: WASHINGTON D.C. Last June the WTO rendered a final decision in the U.S. case against the European Community finding that Europe had provided EADS/Airbus $20 billion in illegal subsidies including $15 billion in direct launch aid for the development of every aircraft model it had produced over the past 40 years.
The value to EADS/Airbus of these illegal subsidies over time is estimated at almost $200 billion.
• On January 31 2011 the World Trade Organization (WTO) rendered a final decision on European claims of U.S. Government assistance to Boeing. In a sweeping legal victory for the U.S. the WTO rejected all but a fraction of the European Unions claims approx. $2.6 billion.
• In contrast to the massive $15 billion in illegal launch it found the Europeans had provided to EADS/Airbus the WTO did not find any instance of illegal U.S. Government launch aid to Boeing.
• Having used illegal subsidies to take 20 market share from the Boeing Company EADS/Airbus now contends that they are owed even MORE from the US Government! EADS/Airbus is publically suggesting that they are owed $45 billion from the U.S. Government and American taxpayer -- a figure that is neither connected or relevant to the current WTO proceedings.
• On the other hand the U.S. Trade Representative has stated that illegal European subsidies to EADS/Airbus have resulted in the loss of 65000 U.S. aerospace jobs.
o From 1999-2004 the number of U.S. Boeing employees producing commercial airplanes fell from 116000 to less than 55000 and this does not include tens of thousands of additional lost supplier jobs . Market distorting pricing by an illegally subsidized EADS/Airbus was a key factor.
o During this same five year period illegal subsidies helped EAD/Airbus increase its share of the commercial airplane market by an astounding 20. It is hard to place an exact value on the impact to the American economy and the U.S. aerospace industry of losing a 20 share of the commercial airplane market but it is in the hundreds of billions of dollars if not more.
• Having illegally bought more than 50 of the global commercial aircraft market EADS/Airbus is now employing the strategy in an effort to win a taxpayer funded $35 billion defense contract to build the U.S. Air Forces next fleet of aerial refueling tanker aircraft. • Last June the WTO determined that the Airbus A330 aircraft the plane it is offering to the Air Force as its tanker is the most heavily subsidized (at more than $5 billion) of all Airbus aircraft. In contrast development of the 767 aircraft the basis of the Boeing tanker was paid for 100 by Boeing. • In a continuing show of bipartisan support the House of Representatives voted 410-8 last May and 325-23 last December to direct the Department of Defense to take illegal subsidies into account in the Air Force Tanker competition but that has not happened. • Boeing the U.S. aerospace industry and American workers are not competing against another company in EADS/Airbus -- they are competing against multiple foreign governments and state treasuries who subsidize EADS/Airbus to create jobs in Europe not in the U.S. • Until illegal subsidies are taken into account in the Air Force tanker competition the competitive playing field for American industry American taxpayers and American workers will not be level.
