Foreign companies mock US trade law — do we even notice?

The aerospace industry was surprised days ago when Bombardier announced it was selling a majority stake in its C Series airplane program to Airbus for the whopping price of a single Canadian dollar. As the shine begins to fade from the partnership announcement and tough questions pile up, it is now clear this ploy is yet another bailout for the C Series — and a bold attempt to circumvent U.S. trade law.

Let’s consider the broader issues at stake in Boeing’s ongoing trade dispute against Bombardier. This case is not about Boeing stifling competition, as Bombardier has falsely alleged. Quite the opposite — Bombardier has violated every free trade principle in the book and got caught in the act. Now Bombardier is so intent on dodging the consequences of their actions they have given away their marquee airplane program for nothing. How can we have a trading system if shamelessly sidestepping the rules that govern it is this easy?

{mosads}When companies and nations cheat, people around the globe increasingly question the benefits of international trade. Most people recognize that trade brings many benefits, like lower consumer prices, a wider choice of goods and many innovations. The issue for them has more to do with whether trade is fair or whether governments rig the system to favor their home industries. That is precisely what Canada and Bombardier have done.

When only the U.S. abides by free trade agreements and our trading partners cheat, American workers suffer. Without enforcement to be sure that everyone is playing by rules, trade becomes a free-for-all, and a race to the bottom in terms of government subsidies, non-tariff barriers, and any number of other illegal schemes designed to give companies and countries an advantage over their competitors.

Trump jokes he’ll cancel Boeing deal with Singapore airline if it doesn’t create thousands of US jobs https://t.co/TPMO5fqM9L pic.twitter.com/iFdikzSt2c

— The Hill (@thehill) October 23, 2017

Boeing has done nothing more than petition the U.S. government to follow the facts and investigate whether Bombardier has violated U.S. and international trade law. The International Trade Commission began an investigation in June. Since then, the U.S. Department of Commerce has affirmed that Bombardier has both illegally subsidized and illegally dumped its product in the U.S. marketplace. The ITC has also made preliminary determinations on the amount of import duty that will be assessed against C Series deliveries into the U.S. when the ITC investigation concludes next year.

Bombardier and the allies it has recruited have attempted to brand Boeing’s action as “protectionist.” Is it protectionist to expect companies to abide by international agreements and domestic trade laws? Those agreements and laws were put in place to ensure a fair and level playing field, and they came into being because the world’s trading nations endorsed them. Ignoring the agreed upon rules risks an unravelling of trade agreements and all the benefits that flow from trade.

And let’s be clear about the stakes here for our economy: A subsidized, dumped C Series airplane, left unchecked, is a clear and present threat to the American-built Boeing 737 airplane and the U.S. workers who build it.

According to Boeing data, the 737 program — which competes with the C Series — generates more than $22 billion in annual economic impact in the U.S. It supports hundreds of thousands of jobs across the country through direct employment at Boeing and in its U.S. supply chain. There are 300 U.S. suppliers to the 737, including many small businesses, in 41 states. Despite this robust economic footprint, Airbus is now betting it can buy political support for the C Series by promising some U.S. jobs as part of this trade law dodge. Time will tell if our elected leaders will fall for that spin.

U.K. leaders threaten Boeing over tariffs on Canadian jets https://t.co/ovOcaSLbL0 pic.twitter.com/KEEGo9PnkY

— The Hill (@thehill) September 27, 2017

Bombardier has tried to justify its illegal behavior by claiming that Boeing and other aerospace companies are subsidized too. It’s true that Airbus has been heavily subsidized since its inception, and continues to take billions of euros and pounds from host governments every time it launches a new airplane product — even though the World Trade Organization (WTO) has ruled the subsidies illegal and market-distorting.

But claims that Boeing is subsidized in a prohibited market-distorting manner are patently false. The WTO has thrown out all but a handful of claims that the European Union brought against the United States. And where there have been final rulings that needed to addressed, the U.S. and Boeing have stepped up to their obligations to the WTO’s satisfaction.

The bottom line is that people have traded with each other for centuries because they see the real and mutual benefits of trading. They also recognize the value of fair rules, and the need for everyone to abide by them. That is all Boeing and the U.S. government are seeking. Bombardier and Airbus are free to sell their airplanes wherever they want, including in the U.S. But they need to abide by the rules of trade that everyone has endorsed.

No one should be fooled by the campaign of misinformation being propagated by Bombardier, Airbus, and their allies. And no subsidized company promising to create some jobs in one place while threatening thousands elsewhere can rightfully be viewed as a job creator. We have to be smart, stand up for U.S. workers and industry, and take notice when foreign companies flout the law.

George Landrith is the president of Frontiers of Freedom, an educational foundation whose mission is to promote the principles of individual freedom, peace through strength, limited government, free enterprise, free markets, and traditional American values.