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TANKER: Murray and Cantwell Call on President to Make Sure Pentagon Heeds His Call to Support American Workers and Businesses

Jan 26 2011

After State of the Union speech, Senators call on Administration to take into account the effect of illegal subsidies on bids for government contracts; support American aerospace workers

(Washington, D.C.) – The day after President Obama delivered a State of the Union address focused on ensuring we put American businesses and workers in a position to compete and win in the future, Senators Patty Murray (D-WA) and Maria Cantwell (D-WA) led a bi-partisan letter to President Obama calling on him to ensure a fair playing field for American workers in the competition to replace the Air Force’s refueling tankers. Currently, American workers are competing against an illegally subsidized foreign company.

“For too long American aerospace workers and the critical economic sector they represent have been disadvantaged by trade-distorting and illegal subsidies provided to their foreign competitors,” the Senators’ wrote.  “We believe that the U.S. government must act toughly and tirelessly to ensure that jobs here at home are not lost because of an unfair competitive disadvantage in the world economy.”

Joining Senators Murray and Cantwell on the letter were Senators Pat Roberts (R-KS), Jerry Moran (R-KS), and Roy Blunt (R-MO).

The full text of the Senators’ letter follows:

January 26, 2011

President Barack Obama
The White House
1600 Pennsylvania Avenue, N.W.
Washington, D.C. 20500 

Dear Mr. President:

In your State of the Union address you spoke of the importance of keeping America competitive in an era of globalization.  We strongly agree. No one is more productive than the American worker, and we have confidence that the American worker will succeed in the global marketplace if the playing field is level.  But for too long American aerospace workers and the critical economic sector they represent have been disadvantaged by trade-distorting and illegal subsidies provided to their foreign competitors. We believe that the U.S. government must act toughly and tirelessly to ensure that jobs here at home are not lost because of an unfair competitive disadvantage in the world economy.

As part of this strategy, it is critical that U.S government policy be consistent across all federal agencies.  Foreign governments or companies should not be rewarded for products that benefited through the use of illegal subsidies or for disregarding international standards.  In the case of subsidies provided to Airbus by European governments, however, there is a gap in government policy that puts the American worker at a competitive disadvantage and could cause further harm to the domestic aerospace industry.

The World Trade Organization issued a final ruling on June 30, 2010, finding that illegal subsidies have caused serious damage to America’s aerospace industry, workers and economy.  The cumulative market value of these subsidies approaches $200 billion in today’s dollars.  Your U.S. Trade Representative – Ambassador Ron Kirk – has stated that these subsidies “caused adverse effects to the interests of the United States.”  Yet the Department of Defense has indicated that it will not take the illegal subsidies into account in its KC-X source selection for the next generation of aerial refueling tankers.

We believe that the U.S. government must establish a consistent policy across all government agencies that takes into account the effect of illegal subsidies on bids for government contracts such as the KC-X award.  Such a policy would fit naturally into the pro-competiveness agenda you outlined in your State of the Union Address.  We look forward to working with you to grow the American economy by allowing American workers to compete on an even playing field.

Sincerely,

Senator Patty Murray (D-WA)
Senator Maria Cantwell (D-WA)
Senator Pat Roberts (R-KS)
Senator Jerry Moran (R-KS)
Senator Roy Blunt (R-MO)