Washington, DC (PRWEB) January 26, 2010
Frequent fliers fail to recognize their own high stakes in the litigation (WTO Case Number DS353; WTO Case Number DS316) between the United States and Europe over government subsidies to Boeing and Airbus, according to a new analysis by The Forerunner Foundation, a Washington, D.C., policy organization.
For six years the U.S. Trade Representative and the European Union have traded accusations of unfair competition in the worldwide market for commercial aircraft. Boeing claims Airbus got billions of dollars in favorable loans and other so-called "launch aid" during the 1970s. Airbus counters that Boeing dominated the market by accepting even more generous donations from American taxpayers. The Europeans say Boeing benefits from huge state and federal tax breaks and free access to government-sponsored aerodynamics research and development.
"Everybody who buys a plane ticket should pay close attention to what the United States and European governments have done and continue to do to support their home-grown aircraft industries," said Jerry Cox, an aviation policy analyst who reviewed the issue for the D.C.-based Forerunner Foundation. "The combatants focus on the amount of government subsidies, but the real issue for American consumers is how to achieve and maintain competitive balance between the world's jet makers. Competition is essential for airlines to pay reasonable prices for planes and charge passengers reasonable fares."
Forerunner plans a series of three video postings on the Internet site YouTube to describe the past, present and future roles of government subsidies. The first issue brief, posted today, focuses on seed money each company received in its earliest days.
"In any dispute before the World Trade Organization, national pride on both sides tends to eclipse important facts," Cox noted. "We decided to begin at the beginning, and that revealed a wealth of undisputed information that Boeing relied heavily on Uncle Sam when the company launched the world's first airliner in 1933."
"Government subsidies have helped give airlines choices when they buy new, fuel-efficient fleets," Cox added. "However, if excessive government subsidies and other forms of protectionism upset that balance, travelers will have to dig deeper into their own pockets and tens of thousands of aviation workers could lose their jobs."
The commercial aircraft units of Boeing and Airbus each employ directly more than 50,000 people.
Future Forerunner postings will assess the current competitive balance and examine the potential impact of new competition. COMAC, a state-sponsored Chinese company, threatens to end the Boeing-Airbus duopoly in large aircraft, while Embraer of Brazil and Canada's Bombardier are expanding their "regional jet" designs to compete with the smallest Boeing and Airbus passenger planes, the B-737 and A-320.
The Forerunner Foundation, established in 2005, is an independent, not-for-profit organization dedicated to forward-thinking public policy. Commentaries and other concise materials related to transportation safety, security and modernization have appeared in several globally influential publications, including magazines - Forbes, Aviation Week & Space Technology and Railway Age - and newspapers across the country - the Washington (DC) Times, the Seattle (WA) Post-Intelligencer, the Columbus (OH) Dispatch and the Mobile (AL) Press- Register. Cox, who is a Forerunner Managing Director and co-founder, was legislative counsel to U.S. Senator John C. Danforth (R-MO), who chaired committees with jurisdiction over aviation and international trade.
RELATED LINKS: (Analysis) http://www.forerunnerfoundation.org/TRADE
(Video Issue Brief) http://www.youtube.com/forerunnerfoundation#p/u/4/mQZvOGfdFGM
Contact: Jerry W. Cox, 703-757-5866