Lawmakers want EADS booted from bid
By JEN DIMASCIO
Politico
9/4/2009

The results of a global trade dispute should disqualify the European
Aeronatic Defence and Space Co. from the Pentagon’s competition to build
aerial refueling tanker aircraft, Rep. Todd Tiahrt (R-Kan.) said Friday.

According to news reports, the World Trade Organization ruled Friday in
favor of a United States complaint that the European Union provided unfair
subsidies to Airbus, a subsidiary of EADS. The trade dispute has long
loomed in the background of the ongoing contest between Boeing and a team,
made up of EADS and Northrop Grumman, worth up to $35 billion.

“Today’s news further demonstrates the French tanker should have been
disqualified because of illegal subsidies,” said Tiahrt, who spoke about
the ruling with the Office of the United States Trade Representative.

Washington Democratic Sen. Patty Murray and Rep. Norm Dicks, leading
appropriations committee members from the state where Boeing would assemble
tankers, piled on, too, but stopped just short of saying the Pentagon
should bounce EADS from the competition.

They said the ruling shows how subsidies allowed EADS to make A330 aircraft
and other planes without the risk other companies would face, a helping
hand that gives them an unfair advantage in global sales — including the
tanker competition that Air Force officials expect will start again this
month.

“If DoD wants a truly fair competition, it needs to start with competitors
that play by the rules,” Murray said in a statement. “DoD needs to answer
to how this violation of WTO rules will be considered in the competition
for the vital aerial refueling tanker.”

Dicks added: “It would be inconceivable for the Defense Department to issue
its request for proposals for a new Air Force refueling tanker without
including a provision which recognizes the ruling issued today by the WTO
panel: that these Airbus airframes have benefited from illegal subsidies
that gave them an unfair advantage in global sales."

EADS and Northrop Grumman dismissed the rhetoric. The case should have no
bearing on the tanker competition, company officials said.

“Those who try to inject the WTO issue into the tanker competition are
doing our warfighters a disservice,” Northrop spokesman Randy Belote told
reporters this week, adding that the WTO’s ruling on a European complaint
against the U.S. aerospace industry won’t roll in until next spring.

“Successive presidents and members of Congress of both parties have rightly
determined that these issues are irrelevant to U.S. defense acquisition and
have correctly refused to penalize U.S. warfighters by holding their needs
hostage to an international administrative process,” EADS CEO Ralph Crosby,
said in a statement. “The Air Force has said its number one priority is to
replace the service’s Kennedy-era tankers through a competitive
procurement.”