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Murray: WTO Decision Makes Clear that EU Subsidies Have Created Uneven Playing Field, Cost American Jobs

Sep 16 2009

In speech today on Senate floor, Murray highlights economic impact of illegal subsidies on domestic aerospace industry and calls on Administration to take strongest possible actions to prevent additional launch aid

AUDIO

(Washington, D.C.) – Today, U.S. Senator Patty Murray (D-WA) delivered a speech on the floor of the U.S. Senate that focused on the impact illegal launch aid provided to the European aerospace company Airbus has had on the American economy,  jobs and domestic aerospace industry. Murray’s speech comes after the World Trade Organization (WTO) released an interim ruling on September 4th that is reported to have clearly ruled that the launch aid provided by European governments is an illegal subsidy. Senator Murray pushed for the WTO to initiate the law suit in 2005.

In her speech, Murray also discussed her efforts to stop additional launch aid from flowing to Airbus including a letter she sent to President Obama on Monday that called on him and his administration to do everything possible to ensure that European countries do not continue to provide launch aid. Recently several European countries have signaled they may continue to provide launch aid to Airbus despite the interim ruling.

The full text of Senator Murray’s speech follows:

Launch Aid is Clearly Illegal

Mr. President, just two weeks ago the World Trade Organization handed down a ruling in one of our nation’s most important trade cases to date. The ruling was in a case that the United States government – through our Trade Representative – brought against the European Union for providing market distorting subsidies for the European aerospace company Airbus.

It was a case that was brought against the EU not because of minor trade infractions or insignificant manipulation of the international market. But because of decades of playing outside the rules, billions in government subsidies, and repeated warnings by the United States to end the unfair practice of providing a damaging subsidy called launch aid.

And what the WTO ruled, by all accounts, is very clear - launch aid is illegal, it creates an uneven playing field,  it has harmed American workers and companies, and it needs to end.

Mr. President, for me this important decision is long overdue. That’s because in my home state – the home state of much of our country’s aerospace industry – the consequences of competing with the Treasuries of large European governments has been very real, for a very long time. It’s been felt in communities, in local economies and in lost jobs.

EU and Airbus – No Risk, All Reward

And that’s why - as my colleagues know - I have been speaking out against Europe’s market-distorting actions in commercial aerospace for many years.

I've raised my concerns with other Senators, foreign leaders, and Administrations of both parties. In 2005, I helped pass a unanimous resolution here in the Senate on the need to level the playing field for fair global aerospace competition. And that same year, after the European Union mocked our efforts to negotiate in good faith by continuing to provide launch aid, I urged the Bush Administration to move forward with this WTO case.

Mr. President, make no mistake about it, I understand the value of healthy competition in the international marketplace. But I also believe that competitors must abide by the same set of rules. 

One reason I have fought so hard to end these illegal subsidies is because I know that there is a fundamental difference in how our country and Europe view the aerospace industry and fair competition. 

For us in America, commercial aerospace is seen as a private business - some companies will win, some companies will lose, but we allow the marketplace to decide. American aerospace companies like Boeing take tremendous financial risks when they develop and market new aircraft. Their workers, developers and researchers put their jobs and billions of dollars on the line each time.  They literally bet the company with each new plane they develop.

But for Europe, aerospace is a jobs program. And to fund that program they use billions in launch aid. 
So they’re not quite as concerned when Airbus loses money. In fact, they don't even require Airbus to repay launch aid if the aircraft is unsuccessful. It’s no risk, all reward. But as the WTO has now ruled – it’s also a violation of international trade rules and fair competition.

Impact on American Jobs

Mr. President, the plain truth is that these illegal subsidies have cost American jobs. The commercial aerospace industry employs well over half a million Americans with family-wage salaries

But in the past 20 years, as Airbus has continued to grow thanks to billions in subsidies, we've lost hundreds of thousands of American aerospace jobs. These are scientific and technical jobs.

Jobs that keep the economies of communities large and small stable in states all throughout the country. Jobs that support families, pay mortgages, and create other jobs. Jobs that are increasingly precious at a time when we are facing double digit unemployment.

Impact on the Future of Aerospace

Mr. President, American innovation led to the birth of the aerospace industry over 100 years ago.  And since that time we have made air travel safer and brought growth and innovation to our economy. But although we led the first century of flight - unless we recognize the damage these subsidies pose and fight for our workers - we might not have a major role in the next century.

And that is why this ruling is so important. This ruling is much more than a confirmation that Airbus has been breaking the rules.  It is a victory for American workers who produce the world’s best planes but who have been forced to fight an uphill battle. It is a warning to other countries considering entering the aerospace marketplace that launch aid is the wrong example to follow. It reaffirms the spirit of free and fair trade in the international marketplace. And it reminds us that we have to be vigilant.

EU May Ignore WTO Ruling

Because this is certainly not the end of this fight. In fact, there are already signs that the EU and Airbus will flaunt the will of the WTO.

Already - very publically - the governments of France, Germany and the United Kingdom have said that they will 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 – despite any final ruling by the WTO. In other words, in the face of a clear condemnation of their practices, they have said they will do as they please.

That’s why, on Monday I wrote to President Obama urging him and his administration to take the strongest possible actions to prevent European governments from providing Airbus with additional illegal, trade-distorting subsidies.

But it will be all of our responsibilities to ensure that the rules are followed, American jobs our not further endangered, and the future of our aerospace industry is protected.

Because unless we wake up to the threat that continued illegal subsidies pose we will lose an industry that we created, that is critical to our economic recovery, and that will help sustain our nation’s continued growth.

I yield the floor.