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AIA President Hits out at EU Govt's Financial Backing of Airbus

27 May 2005

The Aerospace Industries Association (AIA) President and CEO John W. Douglass said that Government handouts shield European airliner manufacturer Airbus from normal market risks.

He added that the handouts also create unfair trade practices that undermine the United States' competitiveness in aerospace products.

Testifying before the House Transportation Committee Subcommittee on Aviation, Douglass said European nations must stop doling out subsidized loans to Airbus that are clearly illegal under World Trade Organization codes.

""The jet transport industry must be an industry without government- provided launch aid,"" Douglass said.

Douglass spoke during a hearing addressing the U.S. jet transportation industry. Subcommittee Chairman John Mica (R-Florida) called the hearing to look at global market factors affecting U.S. jet producers.

Four European governments have repeatedly given the loans, which do not have to be repaid unless the model is successful, Douglass said. In contrast Boeing must finance its new models on its own.

Douglass said the U.S. and European Union should strive to come to a negotiated settlement over the issue to avoid damaging WTO litigation. But if the Europeans refuse to end the illegal aid the U.S. will have no choice but to pursue the WTO case, he said.

Another concern to the jet transportation industry is an alarming trend of cutting aeronautics research in the United States while Europe and others steadily increase their investment. In the last 12 years the U.S. research budget has plummeted from $1.54 billion in 1994 to $852.3 million in the president's budget request this year.

""The U.S. must renew its commitment to aeronautics research and create a national aeronautics policy,"" Douglass said.

The Aerospace Industries Association (AIA) is the premier trade association representing the nation's manufacturers of commercial, military and business aircraft, helicopters, aircraft engines, missiles, spacecraft, materials, and related components and equipment.





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