These foreign subsidies made the A330 aircraft---which EADS will retrofit for the tanker contract----possible as competitor to the Boeing 767. French and European protectionism is being used to undercut U.S. contractors, kill U.S. jobs, and undermine free trade. The DOD originally included an offsetting provision in the evaluation criteria for these subsidies in order to address trade concerns, only to drop it after Congressional pressure.
Even more disturbing are the dangers the tanker contract poses to U.S. national security. After being lobbied by EADS, the DOD changed its own rules preventing the export of new technologies---like anti-missile technologies---that EADS may develop as a result of the contract, and which it is now free to export to rogue nations like Iran and North Korea. Nor are such concerns without foundation. EADS officials recently showed up at an air show in Iran.
The DOD also gave EADS a special exemption from the “Berry amendment” which requires domestic processing by contractors of specialty metals like titanium for national security reasons. The DOD also made mid-stream and unexplained changes in evaluation criteria that favor the larger aircraft that EADS is offering, and disfavored the more efficient mid-sized 767 Boeing aircraft.
The United States uses two-thirds of the world’s tankers, which are critical to refueling the fighters and bombers that are on the front lines in Afghanistan, Iraq, and other hot spots in the war on terror. Since the dawn of aviation, the tanker fleet has been U.S. built and supplied. EADS has never built a tanker in its history. Little wonder that DOD has acknowledged that without its inexplicable changes in the rules, Boeing scored higher on its evaluation criteria, with significantly more strengths and experience than EADS.
As for worries over EU retaliation, European defense acquisition policies are already highly protectionist; incredibly, just weeks ago, the French objected to a proposal to open these markets to U.S. contractors.
Awarding the tanker contract to build an essential tool of the 21st century war fighter in the global struggle against terrorism to EADS undermines U.S. national security interests and trade policies. Without even taking into account national pride or patriotism, the Department of Defense throwing a contract to French-based EADS is so contrary to good sense and U.S. interests that it should be reversed by Congress and the Bush administration.