[Congressional Record (Bound Edition), Volume 155 (2009), Part 18]
[House]
[Pages 24355-24356]
[From the U.S. Government Publishing Office, www.gpo.gov]




              RESTORING JOB CREATION AND NATIONAL SECURITY

  The SPEAKER pro tempore (Mr. Foster). Under the Speaker's announced 
policy of January 6, 2009, the gentleman from Washington (Mr. Inslee) 
is recognized for 60 minutes.
  Mr. INSLEE. Mr. Speaker, this evening I come to the floor to talk 
about a very important issue both to our efforts to restore job 
creation in America and to our national security, and that is the 
ongoing efforts to replace our air tankers in the U.S. Air Force fleet, 
which are so vital to our national security, that form the backbone of 
our Air Force fleet, and everyone knows that our military security 
depends on our dominant Air Force, air cover for operations. And the 
ability to have that depends on having a very robust air tanker fleet 
to provide fuel for our jets in the air.
  We now obviously need a new tanker because we relied upon the KC-135 
now for decades, and they are now reaching the end of their work life, 
and we need to replace them for air tankers. But, Mr. Speaker, we have 
a real problem right now in that the proposal on how to do that is 
seriously unfair to American workers and seriously jeopardizes our 
national security interest in maintaining a very strong industrial base 
to be able to manufacture these aircraft.
  What has happened to date is that the U.S. Air Force in its third 
effort to replace these air tankers with a contract has issued a 
request asking for proposals to provide air tankers to the Air Force. 
And two bidders have expressed an interest. The Boeing consortium 
domestic company and the Airbus consortium, a largely European content 
product, are proposed bidders on this contract. There will be rigorous 
bidding, and there is a very extensive set of rules that the Air Force 
has set forth on how to run that bidding process so that we can select 
the most efficient, most effective, and most cost-effective aircraft 
for the Air Force.
  But we are very concerned for two reasons about the current status of 
that proposal: one, this existing proposal, as the Air Force has 
proposed to handle the bidding, is extremely unfair to the United 
States worker and extremely unfair to the United States taxpayer and 
extremely prejudicial to the United States economy because at the 
moment, the Air Force has proposed to ignore clearly illegal subsidies 
that one of the bidders, the Airbus, largely European bidder, has 
received from the European Union because it is a clear fact that 
against clear treaties that we have and laws that we have to regulate 
fair trade, Airbus bidder has received billions of dollars in illegal 
launch aids. These are subsidies given to the company by the European 
Union. It is not available to Boeing; it is not available to domestic 
manufacturers.
  Now, this is uncontested. There is no question but that the Airbus 
Company has received the subsidies. It is called launch aid, and launch 
aid is, as it would suggest, it is a clear, unbridled, clear on its 
face subsidy of cash essentially guaranteed by the European government 
to the Airbus Company.
  Now, the problem with that is those subsidies are illegal under our 
trade agreements. They're illegal because we need trade agreements to 
allow our economies to act efficiently, which don't happen when their 
illegal subsidies and these illegal subsidies are against our mutual 
trade rules.
  Nonetheless, the Airbus Company took them. They launched an airframe, 
the Airbus 330, which is the airframe that is now being suggested for 
this proposal by the Airbus Company.
  And in the bidding process by the Air Force, the Air Force intends at 
the moment, unless something changes, to ignore these illegal 
subsidies, to not pay any attention to it whatsoever, to blind their 
eyes and just act as if these illegal subsidies had never happened.
  Now, this is very surprising because the extent and existence of 
these subsidies are so well known. In fact, there is a preliminary 
ruling by the World Trade Organization--this is the arbitrary, the 
referee, if you will, of trade issues--a preliminary ruling that there 
has been a violation in the billions of dollars--and some have 
suggested an excess of $5 billion of illegal launch aid--to the Airbus 
consortium, or the Airbus Company, to launch this particular air 
tanker. And that ruling could be subject to appeal, but the facts are 
quite obvious. It's not like there's any mystery that we need 
fingerprints. The fingerprints are clear.
  The European Union governments essentially guaranteed billions of 
dollars to Airbus, and this contravenes our treaties, and there's been 
a preliminary finding in that regard.

                              {time}  2230

  Nonetheless, the Air Force has proposed to go forward and to ignore 
this clear fact. This simply will not stand and cannot stand, to ignore 
this clear violation, for a variety of reasons.
  Number one, it clearly violates our international treaties and rights 
that we have and the law that has now been incorporated into our 
American domestic law.
  Number two, it is hugely damaging to our ability to try to start 
growing jobs again in this country. All of us know the pain that our 
fellow Americans are suffering tonight in unemployment. We know how 
desperate people are in unemployment lines tonight. While we have 
millions of people unemployed, we can't have one agency of the Federal 
Government, which is our United States Trade Representative, conclude 
that Airbus has received illegal subsidies and sued to enforce 
sanctions against these illegal subsidies, and another agency of the 
Federal Government, the U.S. Air Force, turn around and give a contract 
worth billions of dollars for tankers for the next several decades to 
ship jobs to Europe by the thousands. And it would be in the thousands 
that would be lost if, in fact, this contract is lost.
  So we find it, frankly, incredible that the Federal Government at 
this moment could contemplate running a procurement process that would 
ignore the obvious, which is there have been subsidies that have skewed 
the playing field. We have suggested that this is not only bad for our 
economy and not only takes jobs away from hardworking Americans, a 
couple of thousand of whom work in Washington and probably 6,000 of 
whom work across the country, but it hurts our national security 
because we have a national security interest in having a strong 
military infrastructure and ability to produce airplanes.
  When we send our ability to produce airplanes over to Europe, our 
intellectual capital, our engineering ability, our machinists, our 
tooling, our transportation infrastructure, that is weakened. So for 
several reasons it is simply wrong for the U.S. Government to 
contemplate buying a significantly foreign airplane when these illegal 
subsidies have taken place.
  Now we have the ability to make this right in a way that is 
consistent with our international treaty obligations. We want to follow 
the laws. We want to have a good relationship with our trading 
partners. We want to sell some of

[[Page 24356]]

our products to Europe and around the world, and that is why we don't 
just allow American bidders, exclusively American bidders, in this 
contract.
  But what we expect is that the rules will be followed and fairness 
will prevail in this multibillion dollar issue, and right now it is 
not. So we have the ability and, I believe, the obligation to change 
this procurement formula so that we take into consideration this 
massive illegality.
  And the way we have suggested of doing it is, rather than to ignore 
these clearly illegal subsidies, is to take account of these clearly 
illegal subsidies and adjust the bids of one of the bidders to reflect 
that illegal subsidy. Frankly, what we should do is use the most 
astute, the fairest, the most well-respected manner of determining the 
amount of these illegal subsidies and add it on, adjust it on to the 
bid of the Airbus consortium, and then consider the bids and let the 
chips fall where they may.
  We have a way actually to do this. We have a process in this country 
called the countervailing tariff system that operates through the 
Department of Commerce, and we have a group whose job it is to go out 
when there is an illegal subsidy and figure out how much that illegal 
subsidy was.
  So we need to get the Department of Commerce to crank up that system, 
run the process through, adjudicate what that illegal subsidy was, and 
add that amount to the bid of the Airbus consortium, broken down per 
plane of the amount those illegal subsidies held.
  Now if we do this, we will be fair to the American worker. We will be 
fair to our need to maintain a national infrastructure. We will be fair 
to our trading partners, because it is in our treaty rights to act 
because this is a national security matter. And we will be fair 
because, frankly, it is consistent with at least a preliminary ruling 
out of the World Trade Organization.
  So given all of these facts, that we have the ability to act because 
it is in our national security interest under the exemption of the 
World Trade Organization, given that it is in our ability to act 
because fixed wing aircraft are actually exempt from the procurement 
agreements we have with the European Union and other countries, given 
those facts, we are calling upon a fair bidding process which will take 
into consideration both bidders, but adjusting the price of one of them 
to take into account the clear, obviously inarguable fact that 
subsidies have been received by the Airbus consortium and we will not 
and should not yield on this point. Too much is at stake. Too many jobs 
are at stake and too obvious a violation of trade laws have occurred.
  We have expressed this to the good people at the Air Force. We hope 
that they are considering it. We will be calling on the President to 
act in this regard. It is the right thing to do and we are fully 
capable of doing it, and we should make sure that it is part of this 
process.
  So I would close, Mr. Speaker, by saying that we will be working--and 
by the way, we want to compliment the Air Force personnel who have been 
working diligently. We have tried to run a bidding process twice. They 
now have worked and made very significant improvements in the bidding 
process to make sure both bidders can understand what the rules are. 
But we think this issue of a subsidy needs an improvement in the 
process.
  There are some other things that we need improvement in the process 
to take into consideration the true value and price of gasoline because 
we need to figure that in when we make that procurement, and right now 
the Air Force, frankly, hasn't, I don't think, looked at the real price 
of gasoline going forward.
  But with these improvements, we look forward to an honest, fair, and 
robust bidding process. Let the best bidder win. We believe it will be 
a Boeing product. It is good for America and it is good for the world 
to follow these rules.

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