This column by ACRU Senior Fellow and Policy Board member J. Kenneth Blackwell was published March 5, 2017 by Townhall.
In his first ever address to a joint-session of Congress, President Donald Trump took a firm stand on the side of the American people. He said: “We must create a level playing field for American companies and workers… I believe strongly in free trade but it also has to be FAIR TRADE.” President Trump is right. For too long, foreign countries have taken advantage of American companies and we did little to enforce the protections of these trade deals — which is an integral part of free trade.
One industry, which is indispensable to our economy, is a prime example — the airline industry. Its importance was born on a windy day in December, 1903, when Americans made the dream of flight a reality. Orville and Wilbur Wright launched the first powered, fixed-wing aircraft. For twelve seconds and 120 feet, Orville Wright made history.
Today, more than 10 million jobs are reliant on the airline industry in the United States of America. The airline industry helps drive $1.5 trillion in economic activity. It is, truly, a cornerstone of American innovation and industriousness, but it is facing a threat.
Some nations now seek to game the open skies agreements and create an unfair advantage, putting the burgeoning U.S. airlines industry at risk – and potentially costing us hundreds of thousands of jobs. Qatar and the United Arab Emirates (UAE) are — in essence — plowing billions of dollars in government subsidies into their state-owned airlines, pushing out their competition in an aggressive scheme to corner the airline market.
The actions of Qatar and the UAE were not market driven, there was no new demand for more routes. Their expansion was simply a venture backed by foreign governments to damage and push out U.S. based domestic airlines. The subsidization, and violation of free and fair trade, by the governments of Qatar and the UAE is a prime example of what President Trump has spoken so firmly against — American companies being fleeced by foreign actors who do not seek to engage in free and fair trade, but rather take advantage of our goodwill for their own motives.
Gulf-state owned airlines like Emirates, Etihad Airways, and Qatar Airways have stimulated no new demand in U.S. markets. Their intent is to draw away passengers from other airlines, but again, not through fair competition. With billions in subsidies at their back, they can dominate the market — not to compete in a fair and open manner.
As President Trump boldly stated before Congress: “The first Republican President, Abraham Lincoln, warned that the “abandonment of the protective policy by the American Government [will] produce want and ruin among our people.”
“Lincoln was right — and it is time we heeded his words. I am not going to let America and its great companies and workers, be taken advantage of anymore.”
The United States of America, along with Gulf states like Qatar and the UAE, are partner to over 120 Open Skies agreements. To engage in international commerce, nations must agree to fair and civilized rules. We have upheld our end of the bargain. The Gulf states have not. Qatar and the UAE have poured over $50 billion in subsidies into their airlines — at the expense of our companies and jobs for American workers. President Trump has promised to make America a proud nation once again, to stand up for American jobs and workers. Pushing back against Qatar and the UAE, two nations who have chosen to cheat markets and violate their agreements — which the Obama administration never did — would be a good start to standing up for America’s interests once again.