Boeing, Coalition/Allies, Defense Department, EADS

WTO Decision may impact Tanker program

UPDATED at 2332: The WTO has made a preliminary ruling against Airbus.

While Boeing and EADS  Airbus have gone round and round in the fight over the future of the U.S. Air Force’s tanker fleet, a World Trade Organization decision may throw gasoline on the fire.

The WTO has found that Airbus received illegal subsidies from European governments. The WTO said in a confidential interim ruling that the preferential government loans for the A380 passenger jet constituted an illegal export subsidy, the Wall Street Journal reports.

Undersecretary of Defense Ashton Carter has stated that the KC-X refueling tanker competition, which was thrown back open again last year on the heels of what the GAO called a flawed decision to award the contract to the team of EADS and Northrop-Grumman, would be re-launched “this fall.” If sanctions are issued by the WTO against either the US or the EC, or both, it’s not clear whether there would be an immediate impact on the competition; however, a decision that imposed tariffs on aircraft and aircraft parts from EADS would significantly alter the economics of the EADS/Northrop bid.

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Coalition/Allies

British Defense aide resigns over Afghanistan policy

Erin Joyce, a former British Army major and aide to the UK minister of defense, has resigned, criticizing the government’s handlng of its role in the Afghanistan war.  Joyce’s resignation letter was published by Channel 4 News.

In his letter, Joyce said, ” I do not think the public will accept for much longer that our losses can be justified by simply referring to the risk of greater terrorism on our streets. We also need to make it clear that our commitment in Afghanistan is high but time limited.”

Joyce also criticized NATO allies, saying they do “far too little.” In an editorial published on Channel 4’s Web site, Joyce  wrote, “President Obama needs to show in practical ways his appreciation of our effort…For many, it seems that Britain fights; Germany pays; France calculates; Italy avoids. If the United States is seen as valuing each of these approaches equally then I think they may will end up shouldering the burden themselves, with the destruction of NATO’s credibility that would bring with it.”

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