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Restoring Job Creation And National Security

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Date:
Location: Washington, DC

The SPEAKER pro tempore (Mr. Foster). Under the Speaker's announced policy of January 6, 2009, the gentleman from Washington (Mr. Inslee) is recognized for 60 minutes.

Mr. INSLEE. Mr. Speaker, this evening I come to the floor to talk about a very important issue both to our efforts to restore job creation in America and to our national security, and that is the ongoing efforts to replace our air tankers in the U.S. Air Force fleet, which are so vital to our national security, that form the backbone of our Air Force fleet, and everyone knows that our military security depends on our dominant Air Force, air cover for operations. And the ability to have that depends on having a very robust air tanker fleet to provide fuel for our jets in the air.

We now obviously need a new tanker because we relied upon the KC-135 now for decades, and they are now reaching the end of their work life, and we need to replace them for air tankers. But, Mr. Speaker, we have a real problem right now in that the proposal on how to do that is seriously unfair to American workers and seriously jeopardizes our national security interest in maintaining a very strong industrial base to be able to manufacture these aircraft.

What has happened to date is that the U.S. Air Force in its third effort to replace these air tankers with a contract has issued a request asking for proposals to provide air tankers to the Air Force. And two bidders have expressed an interest. The Boeing consortium domestic company and the Airbus consortium, a largely European content product, are proposed bidders on this contract. There will be rigorous bidding, and there is a very extensive set of rules that the Air Force has set forth on how to run that bidding process so that we can select the most efficient, most effective, and most cost-effective aircraft for the Air Force.

But we are very concerned for two reasons about the current status of that proposal: one, this existing proposal, as the Air Force has proposed to handle the bidding, is extremely unfair to the United States worker and extremely unfair to the United States taxpayer and extremely prejudicial to the United States economy because at the moment, the Air Force has proposed to ignore clearly illegal subsidies that one of the bidders, the Airbus, largely European bidder, has received from the European Union because it is a clear fact that against clear treaties that we have and laws that we have to regulate fair trade, Airbus bidder has received billions of dollars in illegal launch aids. These are subsidies given to the company by the European Union. It is not available to Boeing; it is not available to domestic manufacturers.

Now, this is uncontested. There is no question but that the Airbus Company has received the subsidies. It is called launch aid, and launch aid is, as it would suggest, it is a clear, unbridled, clear on its face subsidy of cash essentially guaranteed by the European government to the Airbus Company.

Now, the problem with that is those subsidies are illegal under our trade agreements. They're illegal because we need trade agreements to allow our economies to act efficiently, which don't happen when their illegal subsidies and these illegal subsidies are against our mutual trade rules.

Nonetheless, the Airbus Company took them. They launched an airframe, the Airbus 330, which is the airframe that is now being suggested for this proposal by the Airbus Company.

And in the bidding process by the Air Force, the Air Force intends at the moment, unless something changes, to ignore these illegal subsidies, to not pay any attention to it whatsoever, to blind their eyes and just act as if these illegal subsidies had never happened.

Now, this is very surprising because the extent and existence of these subsidies are so well known. In fact, there is a preliminary ruling by the World Trade Organization--this is the arbitrary, the referee, if you will, of trade issues--a preliminary ruling that there has been a violation in the billions of dollars--and some have suggested an excess of $5 billion of illegal launch aid--to the Airbus consortium, or the Airbus Company, to launch this particular air tanker. And that ruling could be subject to appeal, but the facts are quite obvious. It's not like there's any mystery that we need fingerprints. The fingerprints are clear.

The European Union governments essentially guaranteed billions of dollars to Airbus, and this contravenes our treaties, and there's been a preliminary finding in that regard.

Nonetheless, the Air Force has proposed to go forward and to ignore this clear fact. This simply will not stand and cannot stand, to ignore this clear violation, for a variety of reasons.

Number one, it clearly violates our international treaties and rights that we have and the law that has now been incorporated into our American domestic law.

Number two, it is hugely damaging to our ability to try to start growing jobs again in this country. All of us know the pain that our fellow Americans are suffering tonight in unemployment. We know how desperate people are in unemployment lines tonight. While we have millions of people unemployed, we can't have one agency of the Federal Government, which is our United States Trade Representative, conclude that Airbus has received illegal subsidies and sued to enforce sanctions against these illegal subsidies, and another agency of the Federal Government, the U.S. Air Force, turn around and give a contract worth billions of dollars for tankers for the next several decades to ship jobs to Europe by the thousands. And it would be in the thousands that would be lost if, in fact, this contract is lost.

So we find it, frankly, incredible that the Federal Government at this moment could contemplate running a procurement process that would ignore the obvious, which is there have been subsidies that have skewed the playing field. We have suggested that this is not only bad for our economy and not only takes jobs away from hardworking Americans, a couple of thousand of whom work in Washington and probably 6,000 of whom work across the country, but it hurts our national security because we have a national security interest in having a strong military infrastructure and ability to produce airplanes.

When we send our ability to produce airplanes over to Europe, our intellectual capital, our engineering ability, our machinists, our tooling, our transportation infrastructure, that is weakened. So for several reasons it is simply wrong for the U.S. Government to contemplate buying a significantly foreign airplane when these illegal subsidies have taken place.

Now we have the ability to make this right in a way that is consistent with our international treaty obligations. We want to follow the laws. We want to have a good relationship with our trading partners. We want to sell some of our products to Europe and around the world, and that is why we don't just allow American bidders, exclusively American bidders, in this contract.

But what we expect is that the rules will be followed and fairness will prevail in this multibillion dollar issue, and right now it is not. So we have the ability and, I believe, the obligation to change this procurement formula so that we take into consideration this massive illegality.

And the way we have suggested of doing it is, rather than to ignore these clearly illegal subsidies, is to take account of these clearly illegal subsidies and adjust the bids of one of the bidders to reflect that illegal subsidy. Frankly, what we should do is use the most astute, the fairest, the most well-respected manner of determining the amount of these illegal subsidies and add it on, adjust it on to the bid of the Airbus consortium, and then consider the bids and let the chips fall where they may.

We have a way actually to do this. We have a process in this country called the countervailing tariff system that operates through the Department of Commerce, and we have a group whose job it is to go out when there is an illegal subsidy and figure out how much that illegal subsidy was.

So we need to get the Department of Commerce to crank up that system, run the process through, adjudicate what that illegal subsidy was, and add that amount to the bid of the Airbus consortium, broken down per plane of the amount those illegal subsidies held.

Now if we do this, we will be fair to the American worker. We will be fair to our need to maintain a national infrastructure. We will be fair to our trading partners, because it is in our treaty rights to act because this is a national security matter. And we will be fair because, frankly, it is consistent with at least a preliminary ruling out of the World Trade Organization.

So given all of these facts, that we have the ability to act because it is in our national security interest under the exemption of the World Trade Organization, given that it is in our ability to act because fixed wing aircraft are actually exempt from the procurement agreements we have with the European Union and other countries, given those facts, we are calling upon a fair bidding process which will take into consideration both bidders, but adjusting the price of one of them to take into account the clear, obviously inarguable fact that subsidies have been received by the Airbus consortium and we will not and should not yield on this point. Too much is at stake. Too many jobs are at stake and too obvious a violation of trade laws have occurred.

We have expressed this to the good people at the Air Force. We hope that they are considering it. We will be calling on the President to act in this regard. It is the right thing to do and we are fully capable of doing it, and we should make sure that it is part of this process.

So I would close, Mr. Speaker, by saying that we will be working--and by the way, we want to compliment the Air Force personnel who have been working diligently. We have tried to run a bidding process twice. They now have worked and made very significant improvements in the bidding process to make sure both bidders can understand what the rules are. But we think this issue of a subsidy needs an improvement in the process.

There are some other things that we need improvement in the process to take into consideration the true value and price of gasoline because we need to figure that in when we make that procurement, and right now the Air Force, frankly, hasn't, I don't think, looked at the real price of gasoline going forward.

But with these improvements, we look forward to an honest, fair, and robust bidding process. Let the best bidder win. We believe it will be a Boeing product. It is good for America and it is good for the world to follow these rules.


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