Thoughts of an American Centrist

Tuesday, May 31, 2005

Air Wars

Boeing and Airbus are at it again. Well, at least their representative governments are.

Both the US and EU are screaming over supposedly "illegal" government subsidies of these two aircraft giants. The US provides favorable treatment in the form of de-factor government contracts to Boeing, the EU gives "loans" to Airbus that don't necessarily need to be paid back. The key difference, from a trade perspective, is that Airbus' treatment is in violation of WTO rules, whereas Boeing's is not.

As a proud US citizen and supporter of the American economy, I hope we kick some major Airbus butt in this little brawl. Since the subsidies started, Airbus has taken quite a bit of market-share from Boeing without any substantial improvement in its fleet.

As a general consumer of news and a human being, such technocratic arguments bore me to tears, and make me wonder who on earth wrote these stupid trade rules in the first place.

One thing to consider: if, as the doomsday crooners predict, this conflict bestows permanent damage upon both companies, will another company arise? A pox on both your houses! Will Lockheed Martin try to get into the passenger jet business? I doubt it. More than likely, I would expect any reciprocal damage to inspire an Asian airline manufacturer. Are Boeing and Airbus ready for the Toyota of the skies? It may behoove our two orbiting quarrelers to consult with General Motors and Mercedes-Benz before they start down the path to mutual destruction.


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