Why Trump should enforce the Open Skies agreement

No comments

On the heels of the successful passage of President Trump’s tax reform that lowers taxes for tens of millions of America’s working families, the president is making the surprising move of pushing for a tax increase in the form of tariffs.

The president is proposing a 25 percent tariff on steel imports and a 10 percent tariff on aluminum imports – which may very well protect the 140,000 or so American jobs in those industries, but will also simultaneously damage up to 5 million American jobs that depend on steel and aluminum imports. Myopic protectionist schemes rarely help the overall workforce, and they almost always create price hikes for U.S. consumers.

Where tariffs are concerned, the economic costs far outweigh any potential benefit.

President Trump’s instinct here to protect American jobs is unassailable. But his proposed method of implementing protectionist tariffs will (if history is any guide here) backfire and lead to economic disruptions in U.S. manufacturing.

However, as long as the president has started the much-needed conversation about trade deals and protecting American workers, how about an agenda item that would enforce trade agreements in the United States’ favor and protect American workers? The Open Skies trade agreements provide exactly that opportunity.

The enforcement of our Open Skies agreements with the United Arab Emirates would accomplish everything President Trump is seeking to do with the steel tariff proposal, but without the negatives that necessarily result from protectionism.

President Trump has already scored a major victory in this area this year, and should be applauded for the steps he has taken to enforce our Open Skies agreements with other countries. The Open Skies agreements, which are bilateral trade agreements, govern international air travel and stipulate the conditions for fair and free trade in international air travel. The agreements specifically forbid governments from significantly subsidizing airlines because of the market distortions that result from government interference.Two of the most flagrant abusers of that particular provision of the Open Skies agreements have been Qatar and the United Arab Emirates, which have both pumped billions of dollars (upwards of $52 billion since 2004, in fact) into their state-owned airlines in an elaborate scheme to undercut international competition.

In the short term, this type of government-orchestrated market interference tilts the playing field in favor of the grossly subsidized airlines, making it difficult for other international airlines to fly certain routes. In the long term, however, the consequences are much more serious. U.S. airlines, unable to compete with oil-rich governments’ subsidized airlines, will be forced out of major international routes and could even be forced out of business.

The good news is that the Trump administration has been listening to Americans’ opposition to these violations of the Open Skies agreements. And, even more importantly, the Trump administration has taken swift action to enforce the Open Skies agreement.

Back in January, the Trump administration landed a big victory during the U.S.-Qatar Strategic Dialogue, when Qatar agreed to provide detailed and transparent financial records. Those financial records will enable the State Department and other U.S. agencies to evaluate possible violations of the Open Skies agreements.

Moving forward, the Trump administration should insist that the United Arab Emirates submit to the same transparency standards that Qatar recently agreed to implement. That would mean, at a minimum, the full release of its financial records, in accordance with internationally recognized accounting standards.

Fully 10 million U.S. jobs and $1.5 trillion in nationwide economic activity depend on our nation’s airline industry. The enforcement of all of the Open Skies agreements provides a platform for President Trump to protect American workers and consumers, all while creating new economic opportunities.

Ensuring that other nations abide by the both the spirit and the letter of the agreements is critically important for protecting those millions of American jobs. President Trump’s success in January is the model his administration should replicate in its negotiations with the United Arab Emirates.

On the campaign trail, Donald Trump frequently promised to protect the U.S. economy by putting American workers first in policy-making decisions. His campaign message was refreshing for American workers who, all too often, are often overlooked in Washington, D.C.

By enforcing the Open Skies agreements, President Trump is putting into action his America-first campaign promise.

Orignally Posted on the Washington Times.

americans4fairskies2015Why Trump should enforce the Open Skies agreement
read more

Enforcing Trade Agreements to Keep America Safe

No comments

By Robert Mitchell

The United States military is the most powerful fighting force the world has ever seen. During my decades of service as a Navy SEAL and later as a CIA Paramilitary Operations Officer, the strength, intelligence, and determination of our service members was always on display. Whether on the front lines or stationed at a base overseas, our men and women in uniform routinely made tremendous sacrifices to protect and defend both our homeland and our allies.

Even institutions as vast and powerful as the U.S. armed forces do not operate in a vacuum. Our military often relies on the resources of private industry for vital support in contingency operations, and the U.S. civil aviation industry is a crucial partner in that respect.  American air carriers voluntarily make available hundreds of additional aircraft in the event that additional airlift capacity is necessary to move our troops around the globe.  This capability is a cornerstone of our military readiness when undertaking both warfighting and peacekeeping missions

However, American air carriers have been undermined for years by illegal and anti-competitive trade practices by the State of Qatar and the United Arab Emirates.  Their systematic efforts to circumvent and defy existing fair trade practices threaten the crucial role that a healthy aviation industry plays in our national security.

Any interference with military readiness puts the lives of American service members at risk, and we must demand that foreign powers are not allowed to do so with impunity.

After years of inaction from the Obama administration, President Trump finally initiated a mission to stand up both for our troops and for American aviation workers by holding Qatar and the UAE accountable for their behavior. After forcing Qatar to come to the table, he successfully negotiated an agreement that will provide greater transparency to Qatar Airways’ business transactions and stop them from establishing any potential “fifth-freedom” routes. This agreement goes a long way to protect American workers and stop foreign interference in our military readiness.  I thank the President for his effort and his success.

President Trump’s leadership on this crucial issue has been in keeping with his commitment to promote fair trade and strengthen national security, but more work remains to be done.  I have a request for the President: complete the mission.

The United Arab Emirates continues to inject massive subsidies into its two international airlines, Emirates and Etihad Airways. In fact, Emirates recently used that subsidy to purchase 16 billion dollars’ worth of Airbus A380s.  They will use these aircraft to continue artificially expanding capacity and distorting aviation markets around the world. By flying these massive planes on routes that do not necessitate the additional capacity and pricing the seats at unprofitably low rates, carriers that play by the rules, like U.S. airlines, will be forced to abandon once-profitable routes. This flagrant abuse of our trade agreements costs American jobs, and if they are allowed to continue these illegal and anti-competitive trade practices, U.S. military preparedness will continue to be threatened.

This is not acceptable. Although both the United Arab Emirates and Qatar are vital allies in the Middle East, allies can have disagreements. When conflicts arise between friends, it is crucial to resolving them quickly and equitably in the interest of stability. Right now, the UAE and Qatar are embroiled in a diplomatic dispute, and the UAE is unlikely to follow Qatar’s lead and negotiate in good faith with the United States of their own accord. Therefore, action must be taken soon to bring them to the table. Thankfully, President Trump has already shown that he is the man for the job.

President Trump, your action against Qatar was an important first step in keeping America safe and our trade fair. But until the UAE comes to the table and takes significant steps to end the harm they have caused to the American aviation industry and its workers, and to U.S. military readiness, the mission is not yet complete.

Robert Mitchell is a cybersecurity entrepreneur, former Navy SEAL and CIA Paramilitary Operations Officer. 

Published on RealClearDefense.Com

americans4fairskies2015Enforcing Trade Agreements to Keep America Safe
read more

The Irony of Emirates’ Smear Campaigns

No comments

It was not that long ago that Emirates Airways was making international headlines for their splashy television commercials featuring Hollywood A-list actress, Jennifer Aniston. It was not only big news that the airline was shelling out millions of dollars to Hollywood elites for endorsements, but also the content of the commercials was controversial to say the least.

In the ads, Emirates mocked U.S. airline workers – hard working Americans – as lazy, old, and unpleasant. The ads were disgusting and an insult to the hundreds of thousands of American workers who strive every day to deliver safe, reliable, and comfortable travel to millions of travelers, in the U.S. and internationally.It is therefore ironic that the CEO of Emirates, Tim Clark, is calling on U.S. airlines and their employees to “grow up” and comparing them to a “three-year old at the playground.” Seriously?

The U.S. airlines and their employees have put forth a fact-based campaign based on forensic accounting of Emirates, Etihad, and Qatar Airways financials, which are not yet otherwise publicly available in any meaningful way. For Clark to suggest otherwise is yet another weak attempt to distort the truth and distract for the real issue at hand: that Emirates and the other UAE-owned airline, Etihad, as well as Qatar Airways, are taking billions of dollars from their respective governments and using that money to predatorily expand and dump seat capacity into markets that otherwise would not sustain such growth. This subsidized expansion is driving U.S. airlines off routes, costing U.S. jobs and the loss of expansion opportunities for Americans. These are the facts.



americans4fairskies2015The Irony of Emirates’ Smear Campaigns
read more

The UAE’s Bizarre Open Skies Confession And Threat

No comments
That was Emirates Airways CEO Tim Clark’s response to a question about what would happen if the United States government negotiates an Open Skies enforcement agreement with the United Arab Emirates as the U.S. has recently done with the State of Qatar.

Mr. Clark’s response was based on his false narrative that enforcing Open Skies agreements means ending them or changing them. We have addressed this favorite anti-fair competition talking point before, but make no mistake; Mr. Clarke’s words were chosen very carefully.

There are two ways to look at Mr. Clark’s comments.

First, by claiming that if the U.S. were to enforce its Open Skies agreement, Emirates would no longer need the 150 Boeing wide-body passenger aircraft it has on order, he is admitting that his airline intends to fly those aircraft into the United States, ensuring the playing field remains stacked against the U.S. and substantially increasing the harm to U.S. airlines and their employees. This admission shows that Emirates has plans to further distort the international and U.S. aviation market by dumping unwarranted capacity, also known as seat dumping, into routes U.S. airlines fly, forcing them to abandon international routes and thereby cut U.S. jobs. After all, U.S. airlines have to make a profit, whereas Tim Clark and his state-subsidized airline are operating at the largess of the government and have never been concerned about profit. U.S. airlines and their employees can compete and win against any airline when the playing field is level, but Mr. Clark has tried very hard to ensure that the deck is and remains stacked against the United States.

Second, it was a threat. By making that statement, Clark, apparently speaking on behalf of the government, is clearly stating for all to hear that unless the United States government bends to the will of the United Arab Emirates, he will cancel a massive Boeing order. Does that sound like the attitude of a healthy and productive trade partnership? No. Instead, it appears that Clark, and by extension the UAE, are more interested in threats and deceit than negotiating in good faith and abiding by U.S. and international standards.

This second explanation is in keeping with the fact that the United Arab Emirates is showing itself to be a worse trade partner and ally than its main Gulf rival: the State of Qatar. When the Trump administration approached Qatar in an attempt to finally address the long-running aviation subsidization dispute, Qatar agreed to negotiate, and President Trump scored the first big win on this issue in years. President Trump accomplished what President Obama could not do with Qatar, and now has the opportunity to complete the mission with the UAE.

The State of Qatar, a country not dissimilar to the United Arab Emirates in terms of its relationship to the United States, also has billions of dollars worth of aircraft on order from Boeing for its national carrier. However, unlike the UAE and Mr. Clark, Qatar Airways and its national owner, the State of Qatar, did not publicly hold that order hostage to defend their unfair and anti-competitive trade practices. Instead, they came to the negotiating table in good faith, and the resulting agreement is a positive step forward for U.S. workers, the global aviation community and towards ending Qatar’s subsidies of its airline and violations of its Open Skies trade agreement with the U.S.

While Qatar acts like an ally and trade partner, the UAE is digging in its heels and leading with mistruths and lies. The Gulf nation’s bad attitude may be contributing to the recent reports that President Trump is souring on the UAE and its partners’ diplomatic spat with Qatar.

Further, the UAE’s “threat” is hollow. If indeed Emirates were to follow through and cancel their airplane order, there would be no harm to the United States. U.S. airlines and U.S. workers are more than happy to operate the Boeing aircraft that the UAE cancels. With a level playing field, U.S. airlines would have incredible growth and expansion opportunities, requiring additional aircraft and lots of new American jobs. Recently, after the Trump Administration announced the deal with Qatar, Delta Airlines CEO Ed Bastian began talking about the expansion opportunities available to Delta and its employees if the playing field is leveled. Bastian told CNBC: “We need to have a presence in the Middle East. We need to have a presence in India and other parts of Southeast Asia, which we have been run out.” He continued, “By shining a light on the scope of the subsidies and providing transparency, it is going to allow us all to make long-term investment decisions to go into markets knowing that our government is standing behind us.”

America has strategic and economic interests with both Qatar and the UAE, however, those relationships are only valuable so long as they are mutually beneficial. Qatar came to the table and acted the way one expects from a partner, while the UAE seems intent on acting more like an adversary. Hopefully, Mr. Clark does not truly speak for the UAE government, and instead, the UAE negotiators will work with President Trump and his Administration to resolve the Open Skies violations in a manner that will end the UAE’s cheating and level the playing field for American aviation workers.
americans4fairskies2015The UAE’s Bizarre Open Skies Confession And Threat
read more