[Congressional Record Volume 151, Number 41 (Monday, April 11, 2005)]
[Senate]
[Page S3402]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                            AIRBUS SUBSIDIES

  Mr. FRIST. Mr. President, I am pleased that the Senate voted this 
afternoon in support of the resolution I submitted along with the 
Democratic leader, Senator Reid, and the chairman and ranking member of 
the Senate Finance Committee expressing the Senate's concern about 
various subsidies provided by European governments to Airbus. This 
resolution sends a strong signal that the Senate supports the 
President's leadership and commitment to leveling the playing field in 
the large civil aircraft market.
  As many of my colleagues know, the administration has been working 
hard to resolve this issue through the World Trade Organization, WTO. 
Last October, the United States filed a complaint at the WTO alleging 
that the subsidies provided to Airbus were in violation of WTO rules. 
This January, the European Union agreed to freeze launch aid payments 
and other support to Airbus while attempting to negotiate a 
comprehensive agreement on government support to the civil aircraft 
sector.
  Unfortunately, despite the heroic efforts by former U.S. Trade 
Representative and current Deputy Secretary of State Robert Zoellick, 
the negotiations begun in January have broken down. Nevertheless, I 
want to commend him in particular for his involvement in these talks 
and his commitment to achieving a fair resolution of this issue. Since 
January, there has been little discernible progress in addressing the 
launch aid issue, which directly affects Boeing, Airbus's main 
competitor in the civil aircraft market.
  The Senate, in passing this resolution today, is stating very clearly 
that EU subsidies to Airbus must end and that launch aid must be 
rejected in order to avoid WTO action by the U.S. I am encouraged by 
the comments of EU Trade Commissioner Mandelson in favor of extending 
the negotiation period that expires today to give both sides more time 
to reach a fair deal. However, additional discussions will only be 
productive if Commissioner Mandelson recommits to the framework agreed 
to 90 days ago. If the EU continues to flout the January agreement, WTO 
action may be unavoidable.
  In addition, in my view, if the EU were to provide any new launch aid 
support for the A350, the U.S. would have no choice but to immediately 
request a WTO panel. This would be the largest trade dispute in the 
history of the WTO. I hope we do not have to go that route. It would be 
much better if both sides would come back to the table and restart 
substantive negotiations with the goal of reaching a bilateral 
agreement. American companies can compete with anyone in the world, but 
not on an uneven playing field. Airbus is a mature, profitable company 
that should compete on commercial terms without government subsidies. 
This resolution today says that we believe the playing field must be 
leveled for all competitors in the commercial aircraft market.


                       fourth ``resolved'' clause

  Mr. LOTT. Mr. President, I would ask the majority leader, who 
sponsored this concurrent resolution, to clarify his intended meaning 
of the fourth ``Resolved'' clause on page four of the resolution. I am 
specifically interested in the intention of the use of the terms ``any 
additional action'' and ``large commercial aircraft market.'' I ask 
because the aerospace industry is an integrated and global industry. In 
most every instance, aerospace companies are vertically integrated to 
some degree and they are engaged in many other related activities. In 
many instances, they are component manufacturers, as well as platform 
manufacturers. Would it be correct to understand that the majority 
leader does not intend that this clause target these other business 
activities that are not directly associated with the marketing and sale 
of large fixed-wing aircraft to commercial carriers in the passenger 
transportation market?
  Mr. FRIST. Mr. President, I thank the Senator for his question. The 
phrases ``any additional action'' and ``large commercial aircraft 
market'' are solely intended to address those activities associated 
with business activities regarding the marketing and sale of large 
fixed-wing aircraft to commercial carriers in the passenger 
transportation market. They are not intended to address business 
activities of any specific company at the secondary or tertiary 
supplier level. Nor are they intended to address other business 
activities of any specific company engaged in other platform-related 
activities.
  Mr. LOTT. Mr. President, I thank the majority leader for his 
response. Additionally, I understand that it is not the purpose of this 
resolution, and more specifically of the fourth ``Resolved'' clause, to 
suggest punitive action be taken against any company's activities 
related to products sold to U.S. Government agencies, such as the 
Department of Defense, Department of Homeland Security, or the U.S. 
Coast Guard, whether those products are radars, components of radars, 
or helicopters. Is this understanding correct?
  Mr. FRIST. Mr. President, I agree with the understanding of the 
Senator from Mississippi.
  Mr. LOTT. Mr. President, I thank the majority leader for his 
clarification of the resolution and its intent. I would encourage all 
of my colleagues to consider with care the possibility of unintended 
consequences. The complexity of this industry is such that my State and 
almost every State has numerous business and economic interests that 
could be negatively impacted if we are not careful about how we respond 
to a legitimate concern.
  The PRESIDING OFFICER. The Senator from Oklahoma.
  Mr. INHOFE. Mr. President, I would like to be recognized for two 
unanimous consent requests.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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