By George Landrith, Frontiers of Freedom
In life, there are precious few certainties. The sky is blue, grass is green, and if a country is engaging in unfair trade practices, China is either the direct precipitator of such action or has a hand in it. Color me baffled then, when the head of Airbus, a company widely considered to be a national champion for the European Union (EU), blamed the ongoing global trade wars that have engulfed the global economy on the US, rather than China.
In an interview a couple weeks ago, Airbus CEO Guillaume Faury claimed that current world economic troubles are the result not of Chinese market manipulations, but American actions. He continued to specifically cite a US trade dispute brought before the World Trade Organization (WTO) over the EU providing hundreds of billions of dollars of aid to Airbus in the form of illegal state-sponsored subsidies as an example. This of course, is completely incorrect, and obviously self-serving.
The point of prohibiting illegal subsidies is to make sure that the global marketplace is based on fair competition, not corruption. Airbus has a long history of building its company on the back of huge EU subsidies and using the subsidies to reduce its risk and expand its reach into the world market. These EU subsidies cost billions of dollars to the American aerospace industry.
If Airbus was interested in competing in the global marketplace on the basis of the quality or price of its products without getting billions of dollars in aid from government coffers, then it would be behaving and talking very differently. But that is not the case — Airbus has long relied on government aid and subsidies and now it wants to pretend that is not the case and wash away its past.
In response to American criticism of its unfair trade practices, Airbus claims that the US government provides subsidies for its aerospace industries as well via its purchase contracts. But this is entirely wrong. If you or I buy a car from a dealership, we are not subsidizing the dealership or the car manufacturer. We are buying something of value and paying for it accordingly. A subsidy is when a government provides cash without buying anything in exchange — it is simply a taxpayer-funded gift to help the favored company compete without providing better value, quality, or prices.
Interestingly, the WTO has reviewed the evidence and determined that the EU was in fact violating international law and international trade agreements by providing illegal state-sponsored subsidies and has done so for decades. The WTO then further authorized the US to assess tariffs against EU products that would recover the damages done to the US economy by the subsidies provided to Airbus.
Yet in light of the decision, neither the EU nor Airbus apologized and reassured the world that the abuses would end. Instead, when the WTO authorized the US to impose tariffs designed to recoup the damages done by the illegal subsidies, Europe threatened to impose its own eve higher tariffs on the US and now appears to be pushing itself into the arms of the Chinese.
When Xi Jinping visited Paris this past month, Mr. Faury referred to Airbus as a success story for China. The country has a clear anti-American agenda and perhaps one of its goals is working in concert with Airbus to weaken important American industries. Faury is also likely concerned about rumors that China is threatening to impose tariffs on the European aviation industry in retaliation for EU tariffs on Chinese electric vehicles. This may well explain why he is echoing Chinese talking points, trying to smooth trade relations with Xi Jinping at the expense of the EU-America relationship.
It is clear that the EU and Airbus are entirely unrepentant and very happy to keep violating the law and trade agreements, and their willingness to side with lawless totalitarian regimes like China raises doubts about Europe’s reliability as an ally. By favoring China when it suits them and consistently refusing to meet their international trade obligations, Airbus has engaged in illegal business practices that have undermined American businesses and cost countless high-paying American jobs. It is time for European businesses to play by the rules of the international trade system and recognize the benefits of partnering with America over China.
George Landrith is the president of Frontiers of Freedom, a pubic policy think tank devoted to promoting a strong national defense, free markets, individual liberty, and constitutionally limited government.