Wednesday, February 22, 2012

Obama visits Boeing

Recent reports of President Obama visiting the Boeing plant in Washington made an interesting read.

Moving on: At the Everett plant, he failed to mention the South Carolina debacle, which ended last December

 This NYT report said,
" President Obama, wrapping himself in one of the country’s most glamorous exports, Boeing’s new 787 Dreamliner, vowed on Friday to boost government help for American companies seeking to sell their goods overseas.
“I want us to sell stuff,” Mr. Obama said as he finished a trip to the West Coast, calling on Congress to continue supporting export financing agencies and announcing an array of plans aimed at helping manufacturers.
As this is an election year, Mr. Obama went for the ultimate photo op, using the spectacle of a new United Airlines Dreamliner as his backdrop to ask Congress not to cut financing for the Export-Import Bank, the American export credit agency."
Another report suggested,

Obama, on the final stop of his three-day swing through California and Washington, will tour a Boeing production facility and speak to a crowd of several hundred workers inside the final assembly building for the company's new 787 Dreamliner.
Boeing has become a poster child for a thriving manufacturing sector and American export business, and one Obama will use to highlight a battery of steps he believes will help nudge large and small businesses to achieve similar success.
Obama is directing the Export-Import Bank, which helps finance U.S. companies that want to sell their goods abroad, to more aggressively support firms that face competition from foreign businesses unfairly subsidized by their governments in violation of "international disciplines."
As part of that effort the Bank will also launch a new pilot program for small businesses, providing 6-12 month loans of up to $500,000 to help them grow their exports, officials said Thursday night."
The reports were interesting for a number of reasons: The President identified the interests of Boeing with US national interests. Thus growth in manufacturing and exports which is part of the national trade policy is fuelled by domestic industry's growth. Is the "export" financing initiative in consonance with the SCM Agreement? In the backdrop of the Airbus-Boeing dispute (blogged about it earlier here and herethat has plagued the industry for long, it is surprising that the President did not allude to it (atleast the reports did not make mention of them, unless I have missed something). Any reactions from Airbus on the visit? Any visit of top European leaders to the Airbus plant in Europe?


Tiru said...

That was interesting. Export financing in terms of lines of credit is a common tool. India too has given multiple 'lines of credit' to African nations (and others) through our EXIM bank. Of course, they can use these lines of credit to buy Indian goods only, thus helping our exporters and our economy. I am not aware of these being WTO non-compliant (though I am not sure). I think this is what Obama is talking about.
On the sides, Airbus is a different animal. It's part of larger EADS group, and is owned by multiple countries in EU with manufacturing bases in Germany, France, UK and Spain. Air France uses an all Airbus fleet. However, I have never seen French leaders going hoho like this. Probably, it has more to do with European way of showing solidarity. Silent support.

Srikar said...

I was referring to the category of "prohibited subsidies" in the SCM agreement which refer to subsidies contingent, in law or in fact, whether solely or as one of several other conditions, upon export performance. Would the financing of EXIM to Boeing fall in this category?

The point about the Airbus Boeing dispute is that both allege the other has been heavily subsidised by the State and "illegally" so. Further, it is a classic case where two member countries have identified interests of the "corporations" as representing "national interests" and are engaged in a long winding WTO dispute!