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Fallon Warns Boeing

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Old 28th Sep 2017, 13:04
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Originally Posted by Easy Street
It's already been said, but I feel like repeating it anyway: choosing the KC767 over the A330? Really?
Two comments:
1. May I ask how that that military contract remotely relates to illegal government subsidies for commercial products? The answer is not at all. In other words, a red herring.

2. In the case of the KC-767 and A330 MRTT contest, Airbus chose to provide a non conforming bid (no freighter door and no freighter floor.) And on top of that Boeing underbid Airbus. This being a fixed price contract, Boeing is now reaping the rewards of a low bid by having to write off many tens of millions in cost overruns.
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Old 28th Sep 2017, 13:10
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Originally Posted by Just This Once...
The idea that Europe governments supports its aviation industry whilst the US government does not is dependent on the careful application of a US-prism......etc etc.
The WTO disagreed. Repeatedly.

Even now M1 Abrams are being manufactured and mothballed just to keep the money flowing. As a result no other tank manufacturer could compete for an international sale at the knock-down prices of an M1.
This is an entirely different animal. 1. The M1 is a purely military product, not commercial. Boeing's lawsuit is about a commercial product. 2. There is only one production line and one manufacturer for the M1 and Congress wants to preserve the industrial base to produce tanks. Unlike various UK governments that were/are content to be entirely dependent on foreign manufacturers for all sorts of military equipment, the US government wants to preserve the domestic industrial base for certain military equipment. Tanks being one of them. Fighters also.

Last edited by KenV; 28th Sep 2017 at 13:23.
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Old 28th Sep 2017, 13:51
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This is a pointless argument - all sides find ways to suport their aerospace industries when they want to so let's just cut out all teh name calling please.

The issue is can the UK actually threaten Boeing? I think not - there really is no choice............ this is what happens when you have a monopoly supplier - be it Mr B, BAe or whoever.
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Old 28th Sep 2017, 16:42
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... but for Boeing to shriek hysterically about an airliner (that doesn't compete with their model range) surely speaks volumes that the C series is a terrific aircraft, which is more likely the reason for the complaint.
For the M1 tank argument that a Government wants to support an industry, then that argument equally applies to Bombardier support from Canada and UK....
I think we all realise that there are "assists" from all Governments at times to support R&D and service introduction, be it military or commercial.
Are the new generation Chinese airliners "correctly" priced?

What the US have done by imposing a 220% tariff is to expose themselves to ridicule and pot/kettle comparisons. This is America under Trump where bluster and hyperbole count more than facts and truth.

... but what do I know? 4,000 jobs in NI and UK on the line? Let's see a sensible compromise.... uh oh, perhaps sensible is too much to ask of politicians....
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Old 28th Sep 2017, 16:54
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Originally Posted by KenV
The WTO disagreed. Repeatedly.
Do you really think that?

Their site is here:

https://www.wto.org/english/tratop_e..._e/ds316_e.htm

8.1 Conclusions

8.1. In light of the findings in the foregoing sections of the Report, and with respect to the aerospace tax measures at issue, as amended and extended through Washington State's Engrossed Substitute Senate Bill (ESSB 5952), the Panel concludes that:

a. Each of the seven aerospace tax measures at issue in the present case constitutes a subsidy within the meaning of Article 1 of the SCM Agreement;

b. Regarding the European Union's claim that the aerospace tax measures at issue are subsidies de jure contingent upon the use of domestic over imported goods within the meaning of Article 3.1(b) of the SCM Agreement:

i. The European Union has not demonstrated that the aerospace tax measures are de jure contingent upon the use of domestic over imported goods with respect to the First Siting Provision in ESSB 5952 considered separately;

c. With respect to the First Siting Provision and the Second Siting Provision in ESSB 5952, considered jointly, the B&O aerospace tax rate for the manufacturing or sale of commercial airplanes under the 777X programme is a subsidy de facto contingent upon the use of domestic over imported goods within the meaning of Article 3.1(b) of the SCM Agreement.

8.2. Having found that the B&O aerospace tax rate for the manufacturing or sale of commercial airplanes under the 777X programme is inconsistent with Article 3.1(b) of the SCM Agreement, the Panel also finds that the United States has acted inconsistently with Article 3.2 of the SCM Agreement.

8.3. Under Article 3.8 of the DSU, in cases where there is an infringement of the obligations assumed under a covered agreement, the action is considered prima facie to constitute a case of nullification or impairment. We conclude that, to the extent that the United States has acted inconsistently with the SCM Agreement, it has nullified or impaired benefits accruing to the European Union under that Agreement.

8.2 Recommendation

8.4. Article 4.7 of the SCM Agreement provides that, having found a measure in dispute to be a prohibited subsidy:

[T]he panel shall recommend that the subsidizing Member withdraw the subsidy without delay. In this regard, the panel shall specify in its recommendation the time period within which the measure must be withdrawn.

8.5. The Panel has found that the European Union has demonstrated that the B&O aerospace tax rate for the manufacturing or sale of commercial airplanes under the 777X programme, pursuant to ESSB 5952, is a subsidy contingent upon the use of domestic over imported goods, prohibited under Articles 3.1(b) and 3.2 of the SCM Agreement.

8.6. Accordingly, taking into account the nature of the prohibited subsidy found in this dispute, the Panel recommends that the United States withdraw it without delay and within 90 days.
Again, I am no apologist for either side as it is clear that both sides provide assistance to their aviation industry and WTO rulings seem to go back and forth. Throwing emotive words around like 'illegal' does not really reflect what has been going on in the US for decades.

As for the current situation the US has decided to make a ruling outside of the WTO and have drafted unilateral penalties. I am not sure the WTO would approve of such methods, so good luck.

Last edited by Just This Once...; 28th Sep 2017 at 17:13.
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Old 28th Sep 2017, 17:16
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Originally Posted by Just This Once...
Do you really think that?
Yes, I believe that the complaint does not require application of a US prism and that the WTO agreed.
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Old 28th Sep 2017, 18:33
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Originally Posted by Icare9
What the US have done by imposing a 220% tariff is to expose themselves to ridicule and pot/kettle comparisons. This is America under Trump where bluster and hyperbole count more than facts and truth.

... but what do I know? 4,000 jobs in NI and UK on the line? Let's see a sensible compromise.... uh oh, perhaps sensible is too much to ask of politicians....
What you seem to not know is how to read.

Would it be too much to ask you to bother to read the thread, and the link I provided to the R&N thread before you engage in hysterics? The USITC (look it up, I did) has yet to review this, and the ball is still in play. No tariff increase is in place (so far) and there is plenty of time to challenge this proposal. (As I am sure is being done.)


Now, go back to the first page of this thread, read my post, and then go to the link @R&N where a few wiser heads have made some point about this being *a game still with time on the clock and the ball in play* among the noise and crying, rending of teeth, and gnashing of garments. (Hmm, or the other way around).


For the record, I am not sure of all that's behind this. I don't like tariff wars. They are too often a case of lose/lose. This appears to me to be a negotiating tactic, or an attempt to slip one by that got caught. Not sure). As I see it, Boeing seems to have pulled the old "never hurts to try" and we'll see whether or not they succeed.
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Old 28th Sep 2017, 19:02
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It might not be entirely true, but I've heard it said that Boeing has more corporate lawyers than designers.
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Old 29th Sep 2017, 09:32
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Originally Posted by KenV
TThere is a LOT illegal in receiving government subsidies for commercial products.
Illegal? Depends on who wites the laws
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Old 29th Sep 2017, 11:53
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West Coast wrote:
Is this about no subsidies or an even playing ground? Euroland has been know to play the same games iso it's industrial complex.
Indeed, Westie. I very much doubt whether any of the major manufacturers has been entirely squeaky clean over such matters.

As for our own dear BWoS, see https://www.caat.org.uk/resources/pu...dwin-5-web.pdf (Not that I support CAAT!!)

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Old 29th Sep 2017, 15:23
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"I very much doubt whether any of the major manufacturers has been entirely squeaky clean over such matters."

the art of British understatement..................
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Old 30th Sep 2017, 08:31
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Originally Posted by KenV
Yes, I believe that the complaint does not require application of a US prism and that the WTO agreed.
The multilateral process with the WTO takes years and despite Boeing's efforts the 3 substantive cases they have undertaken against Airbus have resulted in 1 x US withdrawal, 1 x mutual withdrawal and 1 x sanction against Boeing (777X).

Not exactly a great set of results for Boeing and quite a lot of money and years wasted on both sides.

For this international argument Boeing has utilised a US and thereby unilateral body to hear the case and it is difficult to see how other nations will accept the judgement of a potentially biased body.

The concern for the US should be the opportunity they have handed to other countries to take similar unilateral measures against Boeing or indeed any major US industry.

I do share the view expressed by Lonewolf that this unilateral penalty is far from certain or even beneficial to the US. But it has already achieved reputational damage for Boeing and the US government. Unilateral punitive tariffs are rather frowned upon by the WTO, to say the least.

http://www.stltoday.com/business/loc...iderail-latest
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Old 30th Sep 2017, 12:13
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Bearing in mind that negotiating clout is touted as a principal reason for retaining EU membership, the silence from that organisation has been deafening.
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Old 30th Sep 2017, 13:22
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Doesn't affect the EU tho' does it? - just the UK - who have said they want nothing to do with the EU and all its evils...............

So don't be surprised if they just shrug and walk on by and save their powder for the next time Mr B comes after Airbus................... would be different if we were committed to staying in
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Old 30th Sep 2017, 14:00
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Originally Posted by Just This Once...
The multilateral process with the WTO takes years and despite Boeing's efforts the 3 substantive cases they have undertaken against Airbus have resulted in 1 x US withdrawal, 1 x mutual withdrawal and 1 x sanction against Boeing (777X).
Are you sure that’s the latest score?


Boeing declares victory in Airbus subsidies dispute - BBC News
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Old 30th Sep 2017, 19:13
  #36 (permalink)  
 
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It is a game without end.
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Old 1st Oct 2017, 03:39
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Originally Posted by Rosevidney1
It might not be entirely true, but I've heard it said that Boeing has more corporate lawyers than designers.
Not even remotely true - off by several orders of magnitude...
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Old 1st Oct 2017, 10:53
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"Doesn't affect the EU..." except we're in the EU fully paid-up and committed to remaining so for at least three years. If you're right why don't we just save the cash?
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Old 1st Oct 2017, 10:55
  #39 (permalink)  
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Doesn’t affect the EU = Doesn’t affect German industry.
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Old 1st Oct 2017, 11:25
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"we're in the EU fully paid-up and committed to remaining so for at least three years"

and we slag them off at every opportunity..

Do you REALLY expect people to bust a gut for soemone who is (supposedly) desperate to leave the club?

As the poor sods in NI are finding out it's a big, cold, world out there and our "friends" may not be that friendly
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