Today, U.S. Representative Rick Larsen (WA-02) released the following statement in response to the World Trade Organization’s (WTO) final ruling on illegal subsidies for Airbus. Larsen also sent a letter to the Secretary of Defense, urging the Department of Defense to consider the multibillion dollar illegal launch aid subsidies given to EADS by the European Union and end the delays in the tanker competition. Larsen was a co-sponsor of an amendment, passed by the U.S. House of Representatives, that requires the Department of Defense to take into account the illegal subsidies that Airbus has received from European governments when it awards a contract for the next generation of aerial refueling tankers.

“The jury is back and the verdict is in: the European Union is guilty of providing Airbus with billions of dollars in illegal subsidies.  The WTO ruling is clear – the EU’s illegal subsidies have directly harmed American workers.

“The WTO ruling must be the final nail in the coffin of Launch Aid.  Airbus needs to cut off its illegal subsidies for the A350 immediately and try to develop planes the old-fashioned way: using private capital with market interest rates.

“Now that the WTO ruling is out in the open, the Department of Defense needs to consider the impact of these illegal subsidies on the tanker competition.  A fair, open, and transparent competition means taking into account the fact that the A330 benefited from billions in illegal subsidies.

“Washington aerospace workers are the best in the world and I will continue to fight to ensure that they are allowed to compete on a level playing field.

“I commend both the Obama and Bush Administrations for their work on this case.  I urge the Obama Administration to continue pursuing this case aggressively.

Text of Letter sent to Secretary Gates follows:

June 30, 2010
The Honorable Robert M. Gates
Secretary
Department of Defense
The Pentagon, Room 3E880
Washington, DC 20301 - 1000

Dear Secretary Gates:

We have written in the past to express our profound disappointment at the failure of the Air Force to consider the multibillion dollar illegal launch aid subsidies given to EADS by the European Union.  These subsidies caused serious and ongoing distortion in the global market for large aircraft, causing substantial harm to the American aerospace industry.

We are concerned that illegal subsidies will distort the KC-X competition unless action is taken by the Air Force to create a level playing field by acknowledging the existence of these subsidies and taking steps to nullify the advantage they have given EADS. Giving appropriate and due consideration to these bid distorting subsidies in determining whom to award the contract will ensure a fair, open and transparent competition.

Our concern is shared by an overwhelming majority of the House of Representatives.  On May 27th, the House passed by a vote of 410 to 8 an amendment to the National Defense Authorization Act requiring that the Department of Defense consider any unfair competitive advantage an offer or may possess in the KC-X aerial refueling tanker competition.

With the vote taken on May 27th, the House of Representatives said that the KC-X contract has to be fair.  A contract awarded without consideration of Airbus’ illegal subsidies would be deeply flawed.

We ask that you quickly begin the process of ascertaining the extent to which the illegal subsidies have given EADS an unfair competitive advantage. We also ask that you quickly take steps to neutralize such unfair competitive advantage, in order that the tanker competition can proceed and a contract can be awarded without delays.

We look forward to working with you.

Very truly yours,

Rick Larsen
Member of Congress

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