Aviation Industry Can Find Its Salvation In A Trump-Based Jobs Plan

James Burnley | Partner at Venable LLP and Adviser to American Airlines

Decades ago, the U.S. steel industry was a defining part of the American economy. It employed hundreds of thousands of men and women, helped send generations of young people to college and built one of the strongest middle classes in our country’s history. But even the strongest of industries are vulnerable if the U.S. government is indifferent to unfair foreign trade behavior. Cheap foreign steel, subsidized by governments around the world, flooded the U.S. market and drove thousands of steel mills out of business. Today, the steel industry is a shell of its former self. It’s a harsh reminder that the United States must always be vigilant against countries looking to take advantage of our trade deals to undermine and steal our business.

Today, that vigilance is needed in the United States’ aviation industry. When I was the Secretary of Transportation under President Reagan, I advocated for a fair and open aviation marketplace, one where all airlines followed the same rules and could compete without government interference. That idea is at the core of Open Skies agreements: bilateral treaties that allow airlines to travel between two countries without restrictions. But the actions of just a few bad actors threatens to undermine the industry.

In recent years, the United Arab Emirates and Qatar have provided more than $52 billion in subsidies to their state-owned airlines – Emirates, Etihad Airways and Qatar Airways. These subsidies violate the UAE and Qatar’s bilateral Open Skies agreements with the United States. With a constant flow of subsidies from government coffers to the airline’s pockets, these Gulf carriers can fly any route at any time, regardless of demand or legitimate economic concerns. No fair playing business can compete with airlines that don’t consider profit or demand when making decisions. If these subsidies continue unabated and the UAE and Qatar continue to violate our Open Skies agreements, the livelihoods of hard-working Americans will be at risk. Economists estimate that for every route lost or foregone due to unfair Gulf carrier subsidization, over 1,500 U.S. jobs are lost.

Unsurprisingly, enforcing our Open Skies agreements – and stopping these rule-breaking subsides – has broad, bipartisan support. Over 310 members of Congress, governors from red and blue states, local elected officials and business leaders believe that the UAE and Qatar must be held accountable.

The Gulf carriers have recruited allies to spin this incredible momentum as partisan and illegitimate. But that’s a false argument when you consider that members of Congress ranging from Senator Ted Cruz (R-TX) to Senator Amy Klobuchar (D-MN) are passionately advocating for the Trump administration to defend American jobs and enforce these agreements. Moreover, President Trump campaigned on a promise to hold trade-cheating countries accountable and get the best deal for U.S. workers. This issue is perfectly in-line with his goals regarding foreign trade. And American workers were heartened by administration’s success in announcing an agreement with Qatar that would address its unfair behavior and help restore fair competition to the industry.

Now, the Trump administration must turn to the UAE’s trade violations. If our government stands aside, the U.S. aviation industry could suffer the same fate as the steel industry. Today, the warning signs are clear. There would not be such strong bipartisan support to take action regarding the UAE if lawmakers didn’t recognize the urgency of this issue. Fortunately, there is still time to act. We must hold these subsidized carriers and their government owners accountable and demand that they play by the rules.

James H. Burnley IV was the U.S. Secretary of Transportation under President Ronald Reagan. He is a partner at Venable LLP and an adviser to American Airlines.


The views and opinions expressed in this commentary are those of the author and do not reflect the official position of The Daily Caller.

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