Congressman Rick Larsen's Online Office

Washington, D.C. — U.S. Representatives Rick Larsen (WA-02) and Todd Tiahrt (KS-04) – joined by forty-five of their colleagues in the House - sent a letter to President Obama yesterday expressing serious concerns about the lack of coordination between our nation’s defense procurement policy and our nation’s trade policy.  In response to the World Trade Organization (WTO) interim ruling that the European Union (EU) provided Airbus billions of dollars in subsidies in the form of “launch aid,” Larsen and his colleagues questioned how these subsides will affect the upcoming competition to build the next generation of aerial refueling tankers for the U.S. military.

“This WTO ruling confirms what U.S. officials have been saying for years – European nations have provided Airbus with illegal subsidies that directly harm the American aerospace industry and American workers,” wrote Larsen.

In 2008, the Department of Defense awarded a $35 billion contract to build the next generation of aerial refueling tankers to a consortium led by Northrop Grumman and Airbus.  However, this contract award was overturned by the Government Accountability Office due to errors in the Air Force’s procurement process for the tanker program.  The Air Force is expected to restart the tanker competition as soon as this month. 

“Buying Airbus tankers would reward European governments with Department of Defense dollars at the same time that the U.S. Trade Representative is trying to punish European governments for flouting international laws.  Our federal trade policies and defense procurement policies should work in coordination, not conflict.  We believe that American taxpayers must not be forced to foot the bill for products which benefited from illegal subsidies,” the letter continues.

“Last year, I said that President Bush had put his Administration on a collision course with itself by purchasing illegally subsidized tankers,” said Larsen.  “Now the Obama Administration must take steps to explain how they plan to avoid a crash between our defense procurement policies and our trade policies.”

“There is a huge breakdown between our nation’s defense procurement policy and our trade policy,” said Tiahrt. “The Obama administration should not delay in scrutinizing and repairing this broken system. Until then, we should not be giving defense contracts to companies entangled in illegal activities that place American workers at a competitive disadvantage. We need a tanker built by a company that can be trusted and that best meets the needs of the Air Force and the American taxpayer—and I wholeheartedly believe that is the Boeing KC-767.”

 
The full text of the letter follows:

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


Dear Mr. President:

We write to highlight our serious and ongoing concerns about the lack of coordination between our nation’s defense procurement policy and our nation’s trade policy. 

According to media reports, last Friday the World Trade Organization (WTO) issued an interim ruling that Airbus has benefited from significant illegal subsidies.  This WTO ruling confirms what U.S. officials have been saying for years – European nations have provided Airbus with illegal subsidies that directly harm the American aerospace industry and American workers.  We applaud the office of the United States Trade Representative for aggressively pursuing this case over the last five years.

However, we are deeply concerned that the United States Air Force is still considering purchasing over $35 billion worth of aerial refueling tankers which are based on Airbus’ illegally-subsidized aircraft.  Buying Airbus tankers would reward European governments with Department of Defense dollars at the same time that the U.S. Trade Representative is trying to punish European governments for flouting international laws. 

Our federal trade policies and defense procurement policies should work in coordination, not conflict.  We believe that American taxpayers must not be forced to foot the bill for products which benefited from illegal subsidies.

We appreciate your continued commitment to pursuing this meritorious case against Airbus through the WTO and look forward to learning of your plan to resolve the conflict between our nation’s trade policies and defense procurement policies.

Sincerely,

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