President Trump presided over an extraordinary meeting in the Oval Office earlier this month.

The heads of most major U.S. airlines sat down with both Trump and vice president Mike Pence to air their grievances.

The U.S. carriers believe some Middle Eastern airlines are unfairly competing with them. Specifically, they complained about Qatar Airways, which recently bought a large stake in an Italian airline and expanded its flights to the U.S.

The U.S. carriers believe this violates the letter and spirit of the Open Skies agreement, which regulates which airlines get to enter another country’s territory. The goal is to benefit consumers by providing open entry, unless a government-subsidized carrier is using an artificial advantage to unfairly compete with private carriers.

At issue is whether Qatar can use a form of trade “transshipment” — the method that China uses to avoid tariffs by rerouting much of its steel and aluminum exports through Malaysia or Vietnam before they reach the U.S. — to evade a 2018 agreement with the U.S. not to launch flights between Europe and the United States.

Qatar Airways denies its recent explosive growth is being subsidized by the natural-gas rich government of Qatar. But the rest of the aviation industry doesn’t believe that. In fiscal year 2017, Qatar’s government injected $491 million into the flagship carrier.Stay Updated with NR Daily

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It’s probably not a coincidence that was the same year that Qatar Airways bought a 49 percent stake in a failing carrier called Air Italy, which previously had flown only regionally in Europe along with a couple of seasonal flights to the U.S.

Two days after Qatar Airways bought a stake in it, Air Italy began an expansion that now has it making nonstop flights from Milan, Italy to New York and Miami year-round. It also flies from Milan to Los Angeles and San Francisco in the summer.

Its bargain rates are clearly designed to poach passengers from U.S. carriers. It can count on Qatar-government subsidies to make up any losses while it builds market share.

United Airlines CEO Oscar Munoz calls Air Italy “the Italian version of Qatar” and he told President Trump at the Oval Office meeting they fly in the face of existing air service agreements.

But Trump has to factor in the stance of the European Commission, which believes that Air Italy’s activities are permissible under the Open Skies agreement. Last month, the commission used unusually direct language in warning the U.S. it “will take all steps necessary to defend” the rights of Air Italy if the U.S. tries to curb its transatlantic service. In other words, if the U.S. sanctions Air Italy, the European Commission could sanction U.S. carriers.1

But the Trump administration is unlikely to be dissuaded easily. It has long been worried about the abuse of transshipment by foreign nations. Last year, President Trump told reporters that: “If you talk China, I’ve watched where the reporters have been writing 2 percent of our steel comes from China. Well, that’s not right. . . they trans ship all through other countries.”

So watch the outcome of the U.S. negotiations with China over tariffs — the June truce both countries declared to block scheduled tariff increases is set to expire this fall. The transshipment issue will be on the table in those talks. The result of those negotiations could provide a template for how the U.S. approaches the transshipment issue when it comes to airlines applying for entry in the lucrative U.S. market.

Originally Published on National Review.

Last week, President Trump hosted Sheikh Tamim bin Hamad al-Thani, the Emir of Qatar, at the White House.

The two leaders discussed Middle East security and peacekeeping efforts, and celebrated a Qatar Airways agreement to purchase five American-made Boeing 777 cargo planes.

While the order is good news for beleaguered Boeing, which is still reeling from the crashes and groundings of its 737 Max jets, Trump should’ve used the opportunity to hold Qatar and Qatar Airways accountable for a devious scheme to violate its Open Skies agreement with the United States.

Open Skies pacts are intended to level the playing field among international carriers by eliminating government subsidies to airlines and curtailing political involvement in business decisions such as routes and pricing. The agreements are very common; the U.S. maintains Open Skies arrangements with 126 countries throughout the world. In an overwhelming majority of instances, the agreements are followed and respected. America’s Open Skies pact with Qatar is a rare and troubling exception.

After using tens of billions of dollars in government funds to underwrite Qatar Airways, the Persian Gulf nation signed an Open Skies agreement and pledged to stop funneling subsidies to the airline. Just last year, however, Qatar was suspected of again using tax dollars and other government funds to subsidize Qatar Airways.

The Trump administration responded by renegotiating Open Skies to end the illegal subsidies, increase Qatari financial transparency, and freeze new Qatar Airways routes to the United States.

Unfortunately, Qatar was back to its old ways before the agreement was even finalized. Qatari officials concocted a shady way to sidestep Open Skies and both subsidize an airline and launch new routes to America.

Qatar Airways purchased a 49 percent stake in Meridiana, an insolvent regional Italian airline, and rebranded the carrier Air Italy. The new airline operates as a thinly veiled proxy for Qatar Airways, illegally ignoring Open Skies guidelines by offering service to five U.S. cities and pocketing millions of dollars in subsidies from the Qatari government.

Secretary of State Mike Pompeo promised members of Congress the Trump administration is working to address the problem.

“I have personally engaged in this issue and we are working to make sure every party to those agreements complies with every element of those agreements. The U.S. government sees what’s going on…,” Pompeo told lawmakers. “It’s not fair. It’s not right.”

In the meantime, though, Qatar’s Air Italy charade is making Congress and the administration look ridiculous.

Air Italy uses Qatar Airways jets to fly passengers served by crewmembers wearing variations of Qatar Airways uniforms. Until a few months ago, Air Italy’s Chief Operating Officer, Chief Flight Officer, and Vice President for Sales and Distribution were all Qatar Airways executives. Air Italy operates in the red and requires funds from Qatar Airways – and, ultimately, subsidies from the Qatari government – just to stay in business.

By ignoring its Open Skies agreement with the U.S., Qatar is jeopardizing the relationship between two strong allies. The situation is also setting a terrible precedent that the United States is willing to look the other way when countries aren’t playing by the rules – a precedent that could have dire consequences when it comes to trade and military negotiations in the future.

It is imperative that President Trump hold Sheikh Tamim to his commitment to the Open Skies agreement — and send a message to Qatar that disregarding the pact will no longer be tolerated by the United States.

Originally Published on The Economic Standard.

We find ourselves in contentious and uncertain times. At every turn, our national and economic security is being threatened, forcing us to confront the many pressures that seem to confound us. There is no better example of these concerns than the predatory trade practices that have weakened our economic and strategic standing in the world.

Since the end of the Cold War, globalization has dramatically reshaped the world economy. Markets have become so interconnected that disentangling them and returning to a time of economic isolationism now seems an impossible task (just ask the U.K. and the EU). By and large, this interconnectedness has been a good thing. Economic interdependence and free market capitalism have lifted entire nations out of poverty, helped to steady some of the most unstable parts of the world while creating a growing middle-class of hundreds of millions of people.

Despite this progress, increased interdependence is only good if all countries adhere to fair trade principles. But the truth is, more and more countries are not playing by the rules. Some nations have been caught violating the nature and spirit of trade agreements, thereby undercutting the global economy and harming American industries. Under the current administration, more focus has been placed on convincing trading partners to level the playing field through new treaties, but the U.S. also needs to enforce existing agreements. If we don’t, there is no point in signing new agreements.

In particular, I want to discuss the need to enforce two recent agreements signed with Qatar and the United Arab Emirates.

In January 2018, President Trump successfully reached terms on an Open Skies agreement with Qatar and, more recently, signed another deal with the UAE of a similar nature. Open Skies is a web of treaties that regulate which airlines get to enter another country’s territory. The aim of these agreements was to end state subsidies to domestic airline providers, including Qatar Airways, Emirates, and Etihad, as well as to force these companies to comply with standard international accounting practices.

For years, Qatar and the UAE have propped-up their domestic airlines with an estimated $50 billion in state subsidies. Basic economic principles make it clear that when nations buttress domestic carriers with supplemental income, the subsidized carriers are not required to think about profitability the way other airliners, such as Delta, United Airlines, and American Airlines, must do. Subsidized airlines can fly unprofitable routes and provide other services that don’t correspond with market demand. By doing so, they undercut international competitors and steal market share. This forces American airliners to cut jobs and, in some cases, end services.

” If we allow countries to take advantage of the U.S., decades of progress towards international peace and stability will be undermined. “

Despite agreeing to end state subsidies to their domestic airlines, both Qatar and the UAE have gone back on their word. For example, shortly after the announcement of the Qatar Open Skies deal, Qatar Airways purchased a 49 percent stake in Italy’s Meridiana airline and rebranded the carrier as Air Italy. Air Italy then announced new flights to the U.S. This move is problematic because Qatar Airways agreed not to start new flights to America originating outside the Persian Gulf and, in almost all but name only, Air Italy is Qatar Airways. Air Italy’s extensive operating losses are covered by the Qatar Airways. The top executives are almost all former executives at the airline. Even the crew uniforms are almost identical. All of this is a clear violation of the spirit of the Open Skies agreement.

This anti-free market behavior has a direct impact on Utah’s economy. Around 15,000 employees come to work at the Salt Lake City airport every day. In addition, at peak there will be about 2,000 full-time employees working on the airport expansion project. When the Qatari and UAE governments undermine the airline industry, they threaten these jobs.

Fortunately, President Trump has proven that he is willing to do the right thing for American workers and I’m grateful the administration is trying to address this issue. He has taken immediate action when our partners don’t live up to their end of the bargain, and I’m confident he will continue to fight against illegal subsidies and protect American workers.

Our commitment to free market capitalism is part of what propelled America to become the greatest nation in history. But with this position comes a special responsibility, and we must stand up to those who undermine fair trade principles. If we allow countries to take advantage of the U.S., decades of progress towards international peace and stability will be undermined.

U.S. Rep. Chris Stewart represents Utah’s 2nd congressional district.

Originally published on Desert News.

President Trump is in the middle of a growing number of trade disputes. On Sunday, he promised to dramatically raise tariffs on $200 billion in Chinese goods if a trade deal isn’t completed by this Friday.

But while the Trump trade threats over tariffs steal the headlines, the Trump administration will soon have to make a series of decisions about non-tariff barriers to trade. Those include quotas in the new Trump agreement with Canada and Mexico that will supersede NAFTA and a nasty dispute over agreements the U.S. has negotiated to ensure fair competition in international airline flights. In these non-tariff trade cases, the chief debate isn’t over how to convince trading partners to level the playing field but how to enforce existing agreements. As Douglas Holtz-Eakin, a former chair of the Congressional Budget Office, notes, “unless trade agreements are enforced, it does not matter what philosophy drives their negotiation.”

International airline travel has exploded in recent years, making enforcement of the dozens of agreements under the Open Skies Act ever more important. Open Skies regulates which airlines get to enter another country’s territory. The goal is open entry, unless a government-subsidized carrier is using its artificial advantage to unfairly compete with private carriers.

Such is the case with Qatar Airways, which is owned by the fossil-fuel-rich government of Qatar and has spent billions to become a major player in international aviation. Qatar Airways is now so big that the U.S. and Qatar signed an agreement in January 2018 to limit Qatar’s ability to fly directly into the U.S. from European cities. These so-called fifth-freedom flights are carefully negotiated to avoid unfair competition.

But Qatar soon made it clear that it was reinterpreting the agreement in such a way as to make it meaningless. It bought a 49 percent stake in a failing carrier called Air Italy, which previously had flown only regionally in Europe along with a couple of seasonal flights to the U.S. Two days after Qatar Airways bought a stake in it, Air Italy began an expansion that now has it making nonstop flights from Milan, Italy, to New York, Miami, Los Angeles, and San Francisco. Its bargain rates are clearly designed to poach passengers from U.S. carriers, using its Qatar-government subsidies to make up any losses.

Qatar Airways didn’t make much of an effort to hide the fact that Air Italy is basically a front for its Qatari owners. Air Italy’s extensive operating losses are covered by Qatar, its top executives are almost all former executives at Qatar Airways, and even Air Italy’s crew uniforms are almost identical to those worn by employees of Qatar Airways.

A range of U.S. officials, from Democratic senator Bob Menendez of New Jersey to Republican senator Ted Cruz of Texas, have called foul on this subterfuge and complained to U.S. Secretary of State Mike Pompeo. At a recent Senate hearing, Pompeo responded to such concerns by reiterating his support for the Open Skies Act: “The U.S. government sees what’s going on, and we’re working to put this agreement — we think it was a good agreement, and we’re trying to ensure it’s enforced.”5

Open Skies agreements not only promote free-market principles, but they give the U.S. aviation industry the opportunity to compete around the world. The distortions that government-owned carriers in the Persian Gulf are creating in the airline market threaten a wide range of other airline agreements and make a mockery of financial transparency.

As President Trump has decided which trade fights to pick, he has sometimes made mistakes or exaggerated the dangers. But when it comes to the Open Skies agreement with Qatar, the U.S. has an obligation to make sure it is fully enforced. Anything else would make a mockery of the very idea of a trade agreement working in behalf of the American people.

Originally Published on The National Review.

With the Democratic primary campaign underway, presidential hopefuls on the left are seeking to contrast themselves with Donald Trump in a variety of ways. They want to raise taxes on the wealthy to fund free college, free health care, and the Green New Deal. They want to end private health insurance. They want to pack the Supreme Court. They want to let death-row inmates vote. They want open borders.

Meanwhile, they are all but ignoring the president’s America First policy, especially his efforts to reverse the unfair treatment of American companies and industries. This has been an unsung victory for the Trump administration, and Democrats don’t have an answer for it.

Chief among the president’s successes is the renegotiation of NAFTA – which was clearly in need of major modernization and revision.  In its place, President Trump negotiated and implemented the United States-Mexico-Canada Agreement, a fairer trade deal that boosts America’s ability to create new jobs. Trump’s ability to get Mexico and Canada to the table in the first place should be commended. The USMCA is a great trade deal, and Congress should work towards approving it.
 
In addition to the new NAFTA, President Trump has renegotiated our trade agreement with South Korea, with an eye towards greater protection for American companies.  While previous administrations have talked tough on China, the Trump administration has taken aggressive action to stop the unfair treatment of American industries and finally level the playing field. As a result of all these actions, the U.S. trade deficit fell to an eight-month low in February.

Standing up for American companies and workers and ensuring our partners don’t take advantage of us will be a winning message heading into the 2020 elections.

Across the board, the administration has pursued a strong America First policy to ensure that other nations live up to their end of our trade deals.  American companies and industries will compete on a level playing field once and for all.
 
Another critical part of the economy where the President has stood up for the enforcement of existing agreements is the airline industry.  For years, U.S. airlines, workers, elected officials complained that Qatar and the United Arab Emirates were violating the open skies agreements between our nations by illegally subsidizing their airlines and putting our airlines at a disadvantage.
 
While the Obama administration did nothing for years, the Trump administration stood up for our workers and brought both nations to the table and negotiated strong agreements with both to ensure their compliance with the open skies agreements.

Unfortunately, it appears that Qatar has now begun to test the limits of those agreements – and likely the patience of the administration.  Qatar Airways has bought a commanding stake in Air Italy, previously a small regional carrier with financial woes, and Qatar Airways CEO Akbar Al Baker now describes the airline as if it is his own. Additionally, Air Italy and Qatar Airways share many of the same executives, and they are operating almost as one company. Qatar Airways has even provided aircraft from their own fleet for Air Italy to use in service between Milan and New York, an already crowded route. Five other airlines have daily flights along the same path that Air Italy is encroaching in with the help of subsidized Qatar Airways.
 
This represents a violation of the spirit of the hard-fought negotiations between Qatar and the Trump administration and has brought a great deal of criticism.  Senator Ted Cruz, R-Texas, led a group of 11 senators who wrote to the administration asking them to review Qatar’s compliance with the previous deal.  Rep. Matt Gaetz, R-Fla., a key Trump ally wrote to the president urging him to take the issue seriously.
 
Not surprisingly, the administration is keeping a close eye on this issue and if the president’s track record is any indication, their concerns will be addressed.  Secretary of State Mike Pompeo recently said the administration is “looking very closely” at Qatar’s compliance.

President Trump understands that for too long, the United States has been trampled on in trade deals, treaties and alliances and is reworking deals to protect American interests.   Not only is it critical that he continue to renegotiate trade deals, but also to hold our trading partners’ feet to the fire in the commitments they make and ensure they don’t use loopholes to get around them.
 
Standing up for American companies and workers and ensuring our partners don’t take advantage of us will be a winning message heading into the 2020 elections.

Originally Published on Fox News.

WASHINGTON (Reuters) – The Trump administration met with major airlines on Tuesday to discuss complaints that some Gulf states are unfairly subsidizing state-owned carriers, keeping up pressure on the Middle East airlines at the center of a spat with U.S. rivals.

U.S. and Gulf airlines representatives met at the U.S. State Department with administration officials to discuss the status of the government’s review of complaints about subsidies. A State Department official said there would be no announcement after the meeting, but officials plan new talks with Gulf states starting this week.

Heads of the three largest U.S. passenger carriers – American Airlines Group Inc (AAL.O), United Continental Holdings Inc UAL.N and Delta Air Lines Inc (DAL.N) – have urged the Trump administration to challenge the conduct of three major Middle Eastern carriers under “Open Skies” agreements signed in the early 2000s. The U.S. airlines contend the Gulf carriers are being unfairly subsidized by their governments.

The airlines, Qatar Airways, Etihad Airways and Emirates, have denied those accusations. The Gulf airlines operate around 200 flights per week to 12 U.S. cities.

President Donald Trump told airline executives in February he recognized they were facing pressure from foreign carriers, but added that he wanted foreign airlines also to do well.

“They come with big investments, in many cases those investments come from their governments, but they are still big investments,” he said.

In a Sept. 14 White House memo seen by Reuters on Tuesday, Trump administration officials agreed the U.S. government “should take action to address the unfair behavior of Gulf carriers.” It said the government should “seek disciplines on subsidies, transparency and state owned enterprises” and consider withdrawing from the Open Skies agreements if “sufficient progress it not made.”

The Partnership for Open & Fair Skies, which includes Delta, American, United and some major airline unions, on Tuesday applauded “the Trump administration for taking action to level the playing field with the Gulf carriers and their massive government subsidies”, spokeswoman Jill Zuckman said.

But U.S. smaller airlines grouped under the U.S. Airlines for Open Skies Coalition said their larger rivals “still cannot point to a specific violation” of the Open Skies agreements.

It said it was “confident further investigation by the Trump administration will show the claims for what they are: a political ploy to protect themselves from competition and limit choice for U.S. travelers”.

The coalition represents Atlas Air Worldwide Holdings Inc (AAWW.O), FedEx Corp (FDX.N), Hawaiian Airlines, and JetBlue Airways Corp (JBLU.O).

U.S. Travel Association President and CEO Roger Dow also said on Tuesday: “We strongly oppose any efforts to reduce secure travel, connectivity, growth and consumer choice.”

Originally Published on Reuters. 

From enforcing border security and foreign policy to protecting American jobs, Donald Trump is the “Get-Things-Done” President.

Since taking office just sixteen months ago, President Trump has moved at a breakneck pace to enact reforms after reforms that streamline our economy, lower taxes, secure our borders, enforce our trade agreements and reassert America’s strength as the world’s leader advancing liberty.

In the waning days of the Obama presidency, careerists at the State Department put American interests and allies in danger with Obama’s ill-conceived Iran Deal. At the time, Americans were told that the agreement would prevent Iran from acquiring nuclear weapons. Assisting with crafting that narrative was White House staffer Ben Rhodes, a self-proclaimed storyteller, whose entire job appears to have been spinning good yarns to accompany reckless foreign policy initiatives.

In reality, and as predicted by experienced foreign policy experts like National Security Advisor John Bolton, William Tobey of Harvard University and General William G. Boykin, the Iran Deal wasn’t even a speed-bump in Iran’s development of nuclear weapons. Iran continued its nuclear program unabated, while the United States lifted $150 billion in sanctions, along with delivering a $1.7 billion pallet of cash to the Mullahs.

On May 8, 2018, President Trump announced that the United States had officially withdrawn from the Iran Deal, and would instead pursue the reinstatement of sanctions, along with a recommitment to working with our allies to develop a “…a real, comprehensive, and lasting solution…” to the threat of a nuclear Iran.

President Trump recognizes that the very same allies we need to block Iran from becoming a nuclear power have been watching the United States to see if we would honor our commitment to Israel. Time and time again, U.S. presidents have promised to move the U.S. embassy from Tel Aviv to Jerusalem. The Israeli people have seen Republican and Democratic presidents come and go, while the embassy remained in Tel Aviv. But all of that has changed with Trump.

Just last week, President Trump fulfilled that promise, with the opening of the new U.S. embassy in Jerusalem.  The move righted an old wrong, recognizing that Jerusalem is the capital of Israel — something Presidents Bill Clinton, George W. Bush, and Barack Obama had promised to do but failed to execute.

Beyond foreign policy, President Trump has enacted an aggressive America First economic agenda at both home and abroad. The end of 2017 saw the passage of a historic tax reform package. Trump became the first president since Ronald Reagan to accomplish such an extensive overhaul of the tax code. Almost immediately, we saw American workers and taxpayers benefiting from the reform through bonuses and increased wages.

At the international level, President Trump has put American workers first and sought to seriously enforce our trade agreements. The White House has entered into talks with Canada and Mexico about updating NAFTA for the 21st century and making sure that our neighbors to the north and south are upholding their end of the bargain.

Just a few months into 2018, President Trump scored a major win for American airline jobs by resolving two ongoing trade disputes with Qatar and the United Arab Emirates. These two Gulf nations have engaged in illegal subsidization of their national airlines, undermining our Open Skies agreements, and putting American jobs at risk.

White House trade advisor Peter Navarro notes in the Washington Examiner that “…the subsidy-enabled dumping of airline capacity by the Gulf carriers into the U.S. market has nearly eliminated U.S. airline service to the Middle East and India.” And that “every long-haul route forgone by U.S. carriers, more than 1,500 American jobs are lost, they estimate. The result of this unfair competition, these U.S. airlines allege, is that Emirates, Etihad, and Qatar Airways have become among the fastest growing carriers in the world. The UAE’s Dubai airport is now one of the world’s busiest.”

Writing in that same op-ed, Navarro argues that President Trump’s enforcement of the Open Skies agreements is just another example of Trump’s commitment to keeping his campaign promises. Navarro is absolutely correct. President Trump is keeping his word by putting America first.

Isn’t it about time we had a president whose entire agenda puts America — and Americans — first?

Jenny Beth Martin is chairman of Tea Party Patriots Citizens Fund.

Published on The Daily Caller.

President Donald Trump can celebrate another victory for his America First agenda. On Monday, the United Arab Emirates came to terms with the United States, agreeing to uphold the Open Skies agreement between the two nations. For several decades, now, the UAE and Qatar have poured subsidies into their national airlines in an effort to corner the international air travel market. The heavy subsidization has allowed the two Gulf states to engage in capacity dumping – similar to product dumping. Qatar has already come to terms with the United States and has agreed to end their subsidization of Qatar Airways, now the UAE has made the same guarantee regarding Etihad and Emirates.

Enforcing our trade agreements has been a cornerstone of the Trump Administration – and was a key campaign promise that resulted in the President’s 2016 triumph. Across our nation, from Nevada to my home state of Ohio, Americans – especially those who work or have worked in heavy-industry, manufacturing, and industrial labor jobs – have seen the toll exacted on our economy because of our refusal to assert American interests and equitably enforce our trade agreements. With President Trump, that has changed.

Undeterred by “convention”, President Trump has reasserted America’s economic position in international trade. This can be seen from the intense renegotiation of NAFTA terms, to the Trans-Pacific Partnership, to our Open Skies agreements. Former-CBO director and President of the American Action Forum, Douglas Holtz Eakin hit-the-nail-on-the-head when he tweeted that President Trump’s deal with the UAE on the Open Skies agreement was a win because “Enforcing our trade agreements is just as important as negotiating them…” and the UAE “(1) admits subsidies are harmful to competition, (2) will use commercial, arms-length prices, (3) will meet int’l standards of financial transparency, and (4) will freeze loss-leader int’l flights.”

Like on so many other issues, the Obama administration did nothing as American companies and workers, and elected officials on both sides of the aisle, raised concerns about these two nations violating the existing agreements. After years of inaction, Trump and his team acted decisively and worked quickly to ensure enforcement of our deals and the protection of our industries.

Effectively, ours and the UAE’s renewed commitment to Open Skies will ensure that the United States will be aware of any new financial involvement between Etihad and Emirates – allowing us to continue to effectively enforce the agreement. Additionally, the UAE will freeze any new “fifth freedom” routes, preventing capacity dumping, subject themselves to international accounting standards, and require their national airlines to pay for their operation costs out of the UAE’s international airports.

Even more impactful, a major portion of our economy and potentially millions of American jobs are reliant on our nation’s airline industry. By ensuring our foreign competitors are playing by the same rules that we are bound by, we’re guaranteeing that the American spirit of innovation, hard work, and know-how has the best shot to win out as it has time and time again – when the playing field isn’t titled against us. This is what the other side won’t admit. Critics of the administration have fallen back on name calling and spreading fake news about the public-and-open bipartisan coalition standing behind the President. When your critics resort to politics as usual, that is when you know you are winning and doing the right thing for the American people – and not the DC Swamp.

His critics and the news media might not want you to hear it, but President Trump is accomplishing much – especially on ensuring our trade deals are enforced and that all parties abide by the terms of our international agreements. The strength America has shown on trade and diplomacy have and will continue to bear fruit, from our Open Skies agreements to de-nuclearizing North Korea, to updating NAFTA for the internet age. President Trump continues to prove himself as the man for the American people at home and abroad.

Published on Town Hall.

By: Douglas Holtz-Eakin

Yesterday, the United States and the United Arab Emirates (UAE) signed an agreement regarding the future of their Open Skies agreement, a deal that follows on the heels of a similar agreement reached with Qatar a few months back. Open Skies agreements are trade agreements in the form of bilateral treaties that permit cross-border competition in commercial aviation. The United States has over 120 Open Skies agreements, and all but two have been enormous successes.

The new agreement with the UAE addressed a substantive problem: UAE subsidies to state-owned airlines that were forcing competitors out of the market. The subsidies are in violation of Open Skies’ Fair Competition clause — in which all airlines are allowed a “fair and equal” opportunity to compete — and forced U.S. airlines to terminate their competing routes to Gulf nations. Without enforcement, UAE-owned airlines would continue benefitting from these subsidies and driving U.S. competitors out of the market.

By re-negotiating these Open Skies agreements, the Trump Administration has used its trade-enforcement tools to bring the Open Skies agreements back to their original intent. As Eakinomics noted earlier, this willingness to enforce trade agreements will be an essential part of restoring the public’s faith in negotiating future trade agreements.

The UAE agreement is a significant accomplishment. The UAE had resisted attempts to start discussions for three years. The Trump State Department not only got the UAE to the negotiating table, but also achieved several significant steps forward. The UAE acknowledged for the first time the existence of subsidies and the fact that government subsidies undermine healthy market competition. Accordingly, it agreed to conduct all transactions with their airlines at commercial, arms-length prices — no more cushy deals that implicitly are subsidies.

To further display its commitment to a level playing field, the UAE agreed to financial transparency — using internationally accepted standards for accounting and financial statements. Thus, outside groups (e.g., the U.S. carriers) will have the ability to monitor the UAE’s compliance with this agreement. That monitoring is an important part of the work going forward. After all, the UAE did not comply with its original Open Skies agreement; nobody should simply assume that they will comply with this one.

Finally, the UAE agreed that its airlines should not introduce any new “Fifth Freedom” flights — routes on which U.S. customers can travel to, e.g., Europe without actually setting foot in the UAE. The subsidies had driven U.S. carriers off these routes and cut back on the feeder flights from domestic places to cities with international flights. Competition will be improved across both the domestic and international networks.

The agreement is important for commercial aviation in the United States. But it may be just as important as a model for successfully enforcing trade agreements more broadly.

Published on American Action Forum.

In what appears to be a divergence from the terms of the US and United Arab Emirates (UAE) new Open Skies side agreement, a top White House official told industry stakeholders that there is a freeze on adding routes to the US.

Peter Navarro, assistant to US President Donald Trump and director of the White House Trade Council, told aviation industry stakeholders during a briefing May 14 that the UAE had committed to a freeze on fifth freedom routes to the US as part of their agreement to continue the two governments’ Open Skies pact, signed in 2002.

“There will be no additional routes into the United States until further notice,” Navarro said. “That’s a promise that will be kept.” But he added the freeze applied only to passenger airlines, not cargo carriers. FedEx operates fifth freedom rights via Dubai, while Dubai-based Emirates Airline operates two fifth freedom routes, from Italy and Greece, to the US. Abu Dhabi-based Etihad Airways does not operate any such routes.

Navarro’s statements, however, do not sync with UAE government statements, which say the Open Skies agreement remains fully intact. Nor do they fit with the side document recording main points agreed—known as the Record of Discussion—which makes no mention of route freezes or fifth freedom restrictions.

Tori Barnes of the US Travel Association, who attended the White House briefing, asked for clarification about fifth freedoms, route freezes and changes to the Open Skies agreement rights, saying the association did not see any changes in the side document. US State Department assistant secretary Manisha Singh replied, “Your rights under the agreement do not change. That is correct.”

But Navarro then added, “What we expect moving forward is transparency, full accounting, stopping of subsidies and a freeze on routes until further notice. So, there it is. And that’s strictly on the passenger side.”

When Barnes asked for further clarification, Navarro replied, “The US has the rights with the Qataris and the Emiratis over two separate agreements, they agreed to basically not schedule any more routes until further notice. You can call that a freeze. That’s a freeze to me. If you don’t want to use the language, that’s fine. But this only affects them.”

Washington DC-based lobbying organization, the Partnership for Fair & Open Skies, which was hired by those US airlines that wanted to restrict the ability of the major Gulf carriers to expand their US networks, issued a release touting Navarro’s statements as proof that the UAE airlines’ routes have been frozen.

“The UAE has committed to a freeze on fifth freedom routes to the United States,” the Partnership said. “Navarro repeatedly indicated that Trump officials disagreed with UAE Ambassador Al Otaiba’s characterization of his nation’s commitments to the United States, calling Otaiba’s comments “disconcerting” and saying that his comments “seemed to undermine the intent of the letter.”

The White House did not respond to an ATW request for clarification on the governments’ differing interpretations.

The US and UAE governments announced the agreement May 14, with the UAE posting the Record of Discussion. Much of the document is a diplomatic affirmation of the importance of the two government’s economic and security ties and an acknowledgement of the mutual benefits of Open Skies.

The document does not change the US-UAE Open Skies agreement in any way; the State Department also said that all the rights and provisions of the original Open Skies agreement “remain in force.”

Campaigns over three years by American Airlines, Delta Air Lines, and United Airlines, supported by unions such as the Air Line Pilots Association, International (ALPA) and Association of Flight Attendants (AFA), are believed to have cost them some $50 million as they lobbied to prove that Emirates Airline, Etihad Airways and Qatar Airways were heavily subsidized by their governments and therefore were contravening the Open Skies agreements with the UAE and Qatar. The US allegations were not proven, but led to government talks that resulted in the Open Skies side agreements with both the UAE and Qatar.

An agreement was reached with the Qatar government in January.

Published on ATW Online.

WASHINGTON (Reuters) – The United States and United Arab Emirates signed a deal on Friday to resolve U.S. claims that Gulf carriers have received unfair government subsidies, sources briefed on the matter said.

The voluntary agreement, which applies to Etihad and Emirates airline and is expected to be announced next week, is similar to a deal announced in January between the United States and Qatar in which Qatar agreed to release detailed financial information about state-owned Qatar Airways. Since 2015 the largest U.S. carriers have urged the U.S. government to challenge the conduct of the three major Middle Eastern carriers under “Open Skies” agreements. The U.S. airlines contend the Gulf carriers are being unfairly subsidized by their governments with more than $50 billion in subsidies over the last decade.

Published on Reuters.

President Donald Trump’s State Department will reportedly announce a new trade agreement with United Arab Emirates (UAE) on Monday, scoring a victory in a trade dispute over UAE’s subsidizing its two state-owned airlines to the detriment of U.S. airlines and workers.

Breitbart News reported how several foreign nations – including the UAE – have been subsidizing their nation’s state-owned airlines to the tune of $52 billion, in violation of “Open Skies” executive agreements that those nations have with the United States. For the UAE, the two carriers are Emirates Airlines and Etihad Airways. Those “Open Skies” trade agreements are designed to ensure free market competition between airlines, without government support.

The Trump administration acted on the issue after Breitbart News and other outlets brought the issue to light, with the State Department and Transportation Department pushing through an agreement that will protect U.S. workers and bolster America’s economy.

Sources close to the deal speaking exclusively with Breitbart News on condition of anonymity say that the United State and UAE are signing an agreement in private on Friday that will be announced on Monday, ending these subsidies and restoring a competitive environment for U.S.-based carriers.

The new trade agreement will include an explicit admission by UAE that subsidizing airlines harms foreign competitors, reversing three years of denying those accusations. The UAE also agrees to:

• Freeze any new “fifth freedom” flight routes, under which UAE companies could fly routes directly between the United States and other foreign countries, harming the ability of United, American Airlines, and Delta to compete in those same routes.
• Reporting any new transactions involving Emirates Air and Etihad.
• Requiring Emirates Air and Etihad to fully pay for new airport construction and development, which previously had been subsidized by the UAE government.
• Operating in a transparent manner according to international accounting standards, ensuring compliance with the terms of this agreement.
• Meet with U.S. representatives in one year to review the results of implementing the new agreement.

Any violations of this deal could result in the United States invoking Article 15 of the agreement, under which America could disallow any flights by UAE-owed airlines in the United States, with devastating consequences to those foreign airlines.

Experts estimate that the Trump administration’s new trade deal could protect as many as 1.2 million jobs which depend on a robust domestic airline industry.

This deal comes on the heels of the Trump administration’s success in January of getting Qatar to sign such an agreement. Unconfirmed reports are that Secretary of State Mike Pompeo will make the announcement on Monday regarding the UAE alongside the foreign minister from that nation during his visit to Washington.

Supporters of United, American Airlines, and Delta had tried for the final two years of Barack Obama to persuade his administration to do something about this issue. One year after President Trump took office, a new agreement has been reached, consistent with the president’s America First agenda.

Published on Breitbart.

Yesterday, Senator Johnny Isakson – a longtime supporter of Fair Skies – took part in Secretary of State-designate, and current CIA Director, Mike Pompeo’s confirmation hearing. In addition to discussing State Department morale, Senator Isakson asked for Director Pompeo’s commitment to enforce America’s crucial Open Skies Agreements, which have been long-abused by two nations, Qatar and the UAE, which are cheating American workers. Thankfully, Mr. Pompeo offered a clear promise to continue the enforcement of these agreements.

Director Pompeo’s commitment to Open Skies enforcement is a welcome development. The State Department under Secretary Tillerson took an important first step forward when they successfully negotiated a deal with Qatar that resulted in increased transparency commitments from Qatar Airways and an important written pledge not to fly 5^th Freedom routes into the United States. However, the fight is far from over, and American aviation workers need a Secretary of State who will lead the charge against unfair, anti-competitive, and job-killing Gulf aviation trade subsidies. This includes holding Qatar accountable to the agreement it signed and ensuring action is taken to force the United Arab Emirates – which has two subsidized airlines flying into the U.S. – to comply with its Open Skies agreement.

Quickly confirming Director Pompeo as Secretary of State is in the best interest of US consumers and workers, the American aviation industry, and the economy. Americans for Fair Skies calls on the Senate to efficiently conduct the confirmation process so that Director Pompeo can begin the urgent work of helping advance President Trump’s international agenda and stand up for American workers threatened by Gulf cheating.

The Secretary for the US State Department Rex Tillerson has confirmed that the United States and Qatar have come to an understanding on matters about civil aviation. The consensus is aimed at addressing the issues that have been raised by major airlines in the United States about subsidy allegations to carriers in the Gulf. Rex Tillerson stated a representative of the Qatari government in the State Department in Washington. The Qatari representative was among a high-level delegation that had been sent to Washington by their government. President Trump admitted that the meeting of the officials from the two countries was a success and that they would provide the global aviation industry with a level playing ground.

The government of Qatar has committed to releasing an audited financial statement for the past fiscal year of the Qatar Airways which is a state-owned corporation. The financial statement is set to shed light on transactions that the company has been involved in and particularly the ones that have been transacted by entities based in Qatar or owned by Qataris. An assurance has been issued to the United States by the government of Qatar that the state-owned airline will do not have plans of operating fifth freedom flights to America. However, Qatar Airways has not issued any guarantees that it won’t operate such plane in the future. Under the Qatar-US Open Skies pact, fifth freedom flights are permitted.

One of the results of the negotiations between the two countries concludes that the United States will not seek to have the open skies agreement re-opened for talks. The US-Qatar accommodation on aviation comes after major American airlines United Airlines and Delta Airlines spent nearly 36 months pushing the American government to take action on what they alleged as illegal subsidies from the Qatar government to the state-owned airline valued at billions of dollars. The allegation was also leveled by the two American airline majors against the United Arab Emirates to Etihad Airways and Emirates Airlines.

However, it is not clear whether the US government has made the same agreement with the UAE as the one that was reached between the Qatari government and the US State Department on January 30. Labor groups from the US, United, American and Delta airlines praised the agreement between the US and Qatar as a significant leap forward and said that it takes care of the concerns that they have raised for the last three years.

Published on Wings Journal.

Ensuring that our trade agreements are enforced was a cornerstone of President Donald Trump’s campaign in 2016. Now, the President struck a major victory on that front by bringing Qatar to the table and ensuring their compliance with the Open Skies Agreement between our two countries.

BloombergPolitics reports: “Qatar Airways will commit to greater financial transparency and to not run any indirect flights to the U.S. through other countries… .” Greater transparency and the adoption of international norms will help to put an end to the massive subsidization of Qatar Airways by the Qatari government.

This is a great start to trade fairness and the first shot across the bow of the United Arab Emirates who continue to violate their Open Skies Agreement, threatening American jobs, with the heavy subsidization of their airlines, Etihad and Emirates. The world is taking notice that President Trump means business when it comes to taking on trade cheaters.

Published on CNS News.