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Murray to Obama: Strong Action Needed to Prevent Further Harm to American Aerospace Industry, Workers

Sep 14 2009

Senator Murray urges President Obama to "ensure a level playing field," take action to stop additional illegal Airbus subsidies

(Washington, D.C.) – Today, in response to the World Trade Organization’s (WTO) interim ruling that “launch aid” provided to Airbus is illegal and has provided the company with an unfair advantage, U.S. Senator Patty Murray (D-WA) sent a letter to President Barack Obama urging him to take the strongest possible actions to prevent European governments from providing Airbus with additional illegal, trade-distorting subsidies.  Murray also called on President Obama to take the strongest possible actions allowed under the WTO against the European Union to ensure a level playing field for the American aerospace industry and its workers.

Excerpts from Senator Murray’s letter to President Obama:

“For too long, American aerospace workers have struggled to compete on an uneven playing field against Airbus, whose government-sponsored subsidies have allowed the Company to grow without assuming any of the financial risk and accountability that U.S. firms contend with.”

“I am concerned that additional harm could be incurred by the American aerospace industry and more American jobs would be lost as a result. Accordingly, I urge you to take the strongest possible action to prevent further harm from being inflicted on the American aerospace industry.”

“Now that the WTO has confirmed that EU’s previous use of launch aid is illegal and has directly harmed American workers, I urge you to take the strongest possible actions allowed for under the WTO against the European Union in order to ensure a level playing field for the American aerospace industry and its workers.”

On September 4, Senator Murray issued a statement urging the EU and Airbus to heed the WTO’s ruling and to immediately put a stop to plans to provide any further illegal launch aid.

In 2005, Senator Murray led efforts to pressure the Bush Administration to initiate a WTO case against the EU and Airbus. Murray also helped pass a unanimous Senate Resolution that denounced the harmful and market distorting subsidies.

The full text of the letter follows:

September 14, 2009

President Barack H. Obama
The White House
1600 Pennsylvania Avenue NW
Washington, DC 20500

Dear President Obama:

As you know, the World Trade Organization (WTO) recently ruled that “launch aid” provided to Airbus by the European Union (EU) violates international trade rules.  It is my understanding that WTO’s interim decision found that launch aid provided for a number of Airbus aircraft are actionable subsidies under the WTO’s Agreement on Subsidies and Countervailing Measures (SCM Agreement) and that most of these loans amount to a prohibited export subsidy. Although the WTO ruling is only preliminary, it is my understanding that WTO panels have rarely reversed their interim decisions in the final ruling. 

For too long, American aerospace workers have struggled to compete on an uneven playing field against Airbus, whose government-sponsored subsidies have allowed the Company to grow without assuming any of the financial risk and accountability that U.S. firms contend with. These subsidies, which include non-commercial rate loans, have eroded US market share in the commercial aerospace industry and have cost American jobs in a critical economic sector.

Despite the WTO’s interim ruling that launch aid provided to Airbus contravenes international trade rules and has materially harmed the United States, I am concerned that the governments of France, Germany and the United Kingdom continue to publicly move forward with plans to provide Airbus with nearly $5 billion in launch aid for the development of Airbus’s latest generation of airplane, the A350. Should Airbus continue to receive these trade-distorting subsidies, I am concerned that additional harm could be incurred by the American aerospace industry and more American jobs would be lost as a result. Accordingly, I urge you to take the strongest possible action to prevent further harm from being inflicted on the American aerospace industry.

In addition, now that the WTO has confirmed that EU’s previous use of launch aid is illegal and has directly harmed American workers, I urge you to take the strongest possible actions allowed for under the WTO against the European Union in order to ensure a level playing field for the American aerospace industry and its workers.

Thank you for your prompt attention to my request. I look forward to hearing from you on this important matter.


Sincerely,

Patty Murray
United States Senator