Bipartisan Group of Lawmakers Lead Effort to Stop Harm to American Carriers from Illicit Foreign Government Subsidies to State-Owned Airlines (April 30, 2015)
Reps. Dan Lipinski (D-IL) and Bob Dold (R-IL) are leading a bipartisan group of 262 members of Congress in an effort to stop unfair government subsidies to state-owned airlines in Qatar and the United Arab Emirates (UAE). These actions artificially boost these carriers at the expense of American airlines, leading to significant job losses in the United States. In a letter to Secretary of State John Kerry and Transportation Secretary Anthony Foxx, the representatives are urging formal consultations with the governments of Qatar and the UAE regarding the use of subsidies and other unfair practices to distort the market in favor of their state-owned airlines, contrary to the Open Skies policy.
“We have learned that over the past decade the governments of Qatar and the UAE have granted over $40 billion in concealed subsidies and other unfair benefits to their state-owned carriers,” said Rep. Lipinski and his colleagues in a letter. “The subsidies, as defined by the World Trade Organization and U.S. trade law, have taken a wide variety of forms, such as direct cash injections, interest-free loans with no repayment obligations, shareholder advances, significant related party transactions not at arms-length, and subsidized infrastructure, as well as other unfair business practices, such as bans on unions. The evidence is drawn almost entirely from financial statements, most of which have not been released in this country.”
Congressman Lipinski and his colleagues that signed the letter are pushing the Secretary of State’s Office and the Transportation Department to request consultations with Qatar and the UAE, as provided for in the bilateral aviation agreements with those respective countries, to ensure that the agreements address the flow of subsidized capacity by these airlines to the United States.
“Our domestic aviation industry runs a trade surplus and is an economic engine that supplies our economy with well-paying and high skilled jobs that support the middle class,” said Rep. Lipinski. “Confronting massive subsidies and other competition-distorting practices by state-owned enterprises in other sectors of the economy has been a priority of our government. Foreign governments and their state-owned carriers that engage in practices that violate liberalization and free competition should not be exempt from that policy.”