[Congressional Record Volume 154, Number 41 (Tuesday, March 11, 2008)]
[Senate]
[Pages S1831-S1832]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                           TANKER PROCUREMENT

  Mr. BAUCUS. Mr. President, Americans have important expectations for 
their public servants. They expect us to act for the common good. They 
expect us to advance our common values. But first and foremost, they 
expect us to have common sense.
  Last week's Department of Defense tanker procurement decision raises 
serious questions of common sense.
  As some of my colleagues have already discussed, the Defense 
Department last week awarded a $40 billion contract for a new 
generation of Air Force tanker aircraft to the European Aeronautic 
Defense and Space Company, or EADS, the parent company of Airbus.
  Receiving this major contract is an enormous victory for the European 
company. It is a victory for thousands of French, German, and Spanish 
Airbus workers this contract will employ. It is also a victory for U.S. 
contractors who will work on the project. Yet I have serious questions 
about whether this is a victory for good American policy or American 
common sense.
  My concern for this deal is not over the Defense Department's 
procurements. I leave that to my colleagues on the Appropriations 
Committee. I do not question the merits of one tanker plane over 
another. I leave that to my colleagues on the Armed Services Committee. 
But I certainly am concerned and have serious questions about this deal 
from the perspective of international trade. This responsibility falls 
to me as chairman of the Senate Finance Committee.
  The United States values competition and acknowledges the right of 
foreign companies, such as EADS's subsidiary Airbus, to pursue American 
markets and customers. American consumers, including the Federal 
Government, should have the right to buy the product that best suits 
their needs. That is only fair.
  But Airbus is not just another company competing in open markets on 
the merits of its products. It is not just a commercial venture. 
Rather, Airbus is the product of four decades of explicit government-
industrial policies to create a European aircraft industry, an industry 
designed not just to compete with American companies but to defeat them 
with massive government funding. Don't take my word for it. Former 
French Prime Minister Lionel Jospin himself publicly pledged:

       We will give Airbus the means to win the battle against 
     Boeing.

  True to Mr. Jospin's promise, decade after decade, project after 
project, European governments have injected massive amounts of 
subsidies into Airbus, including $15 billion in launch aid.
  These subsidies underwrote between 60 percent and 100 percent of 
Airbus's commercial aircraft development costs, including the A330 
aircraft on which this tanker aircraft is based.
  These subsidies allowed Airbus to develop aircraft under terms 
unavailable to unsubsidized market participants or, as a former British 
Trade and Industry Secretary boasted:

       We are not standing to one side and leaving everything to 
     the market. . . .

  In fact, European subsidization of Airbus was so extreme and so 
anticompetitive that 3 years ago, the U.S. Trade Representative 
initiated a dispute settlement case in the World Trade Organization. 
The USTR does not file these cases frivolously. They do so when the 
damage is real, the case solid, and all other means of resolution have 
failed.
  This case is still ongoing. A WTO panel is currently weighing the 
facts of the case, the effects of these subsidies on our aerospace 
industry, and the compatibility of these subsidies with international 
trade laws.
  What defies common sense to me is that one arm of the administration,

[[Page S1832]]

the U.S. Trade Representative, argues subsidies to Airbus hurt our 
companies, skew global markets, and violate the rules of the game. Yet 
another arm of the administration, the Defense Department, rewards a 
subsidized company with a $40 billion contract to purchase illegally 
subsidized aircraft.
  That is the kind of Government decisionmaking that does not add up. 
It is not common sense, and it raises serious and fundamental questions 
about how this administration goes about its business.
  Does the right hand of the Government know what the left hand is 
doing? Does one agency respect international rules and their effect 
while the other one does not? What was USTR's role in this procurement 
decision? And why did the Defense Department appear to have disregarded 
it? These and other questions need answers, and I look forward to 
pursuing these answers with my colleagues.
  Until we hear a full accounting of this issue, I am left with an 
uneasy feeling that last week's decision by the Defense Department does 
little for the common good or common sense.
  Mr. President, I wish now to speak on an amendment I am going to 
offer when we get to the budget resolution. I will offer the amendment 
when we are on the resolution. I can either make my statement now or 
wait until we get to the resolution.
  The ACTING PRESIDENT pro tempore. Time is expired.

                          ____________________