Brownback & Tiahrt Comment on European Union WTO Case against the United States

Press Release

U.S. Senator Sam Brownback and Congressman Todd Tiahrt today commented on the World Trade Organization's interim report on the European Union's allegations that the Boeing Company received subsidies from the United States. The EU alleges that Boeing benefited from approximately $15 billion in research and development spending by the Department of Defense and NASA and also alleges that another $6 billion was funded by state and local governmental entities. The EU allegations against Boeing make no claims of launch aid or subsidies for the 767, the airplane Boeing has presented as a replacement for KC-135 refueling tanker. This puts Airbus at a competitive advantage against Boeing in the defense procurement process for the new KC-135 refueling tanker.

"For more than 40 years, the EU has pursued a targeted government effort to steal market share in the commercial aircraft industry through massive government subsidies to Airbus," Brownback stated. "The alleged U.S. subsidies of standard economic development tools pale in comparison to the systematic EU strategy to take over the aviation industry. When you compare side by side the alleged Boeing subsidies with Airbus' confirmed launch aid and illegal subsidies, it's easy to see who tips the scales. I am convinced that we must account for illegal subsidies in defense procurement programs, particularly in the case of the new KC-X competition."

Congressman Tiahrt said, "This EU v. U.S. case is simply an attempt by European governments to distract from their $5 billion in illegal subsidies and illegal launch aid given to Airbus for the A330-A340 aircraft as ruled by the WTO in June. Despite the alleged subsides given to Boeing-- none have had the market distorting effects that Airbus has had in killing tens of thousands of U.S. aerospace jobs. I have full confidence that when the WTO makes their final rulings, it will be clear that the case against the European government is the only one of substance and consequence. In addition, this ruling, coupled with the recently decided U.S. v. EU case, once again demonstrate the overarching need to account for illegal subsidies in military procurement contracting, especially the KC-X aerial refueling tanker competition."

None of the alleged subsidies to Boeing have anywhere near the market distorting effects of the launch aid the EU provided to Airbus. Airbus has received more than $178 billion in commercial value provided in the form of launch aid from the governments of France, Germany, Britain and Spain with the understanding that full repayment is required only in the event that Airbus airplanes are commercially successful. A recent WTO final ruling confirmed that the Airbus A330, which is the airplane that was presented as a replacement for the KC-135 refueling tanker, was the most heavily subsidized of any Airbus aircraft and might not even exist today had it not been for those illegal subsidies. Tens of thousands of U.S. aerospace jobs have been lost as a result of the market distortions caused by the illegal subsidies to Airbus.

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