Obama Pledges ExIm Support for Certain Domestic Campaigns

AIN Air Transport Perspective » February 27, 2012
Bombardier C Series
It appears Boeing can count on ExIm Bank support for domestic campaigns against the Bombardier C Series. (Photo: Bombardier)
February 24, 2012, 9:42 AM

President Barack Obama’s February 17 speech at the Boeing plant in Everett, Wash., resonated with those assembled for a number of reasons, but to Boeing Commercial Airplanes, the most encouraging words from the Administration came with some advance briefing material distributed before the event.

“Today, the President will announce that the Administration will actively employ its existing authorities so that the Export-Import Bank can provide U.S. firms competing for domestic or third-country sales with matching financing support to counter foreign non-competitive official financing that fails to observe international disciplines,” said the release. “The President will not allow U.S. companies and workers to lose out on valuable business due to unfair export financing—and will use the Administration’s full powers to ensure that they are competing on an even footing.”

Of course, for many years Europe and the U.S. observed what has become known as the “home market rule,” under which neither Boeing nor Airbus could benefit from export-import bank financing support for sales to airlines based within their respective countries of manufacture. Until Bombardier introduced the C Series, the “gentleman’s agreement” between the U.S. and Europe didn’t need to extend to other countries. Now, following the signature of a new Aircraft Sector Understanding (ASU) negotiated under the auspices of the Organization for Economic Cooperation and Development (OEDC) in 2010, Canada has said it will not observe the home market rule and use all means available to it to support the sale of C Series airplanes to U.S. airlines.

In fact, the new ASU, which takes effect in 2013, contains a proviso for export credit support in the case of competition involving the C Series, largely because of ambiguity centering around the classification of the product as a big airplane or a regional jet.

Obama’s pledge to authorize U.S. ExIm Bank support of Boeing sales to domestic airlines signals an intention to apply “competitive matching” for the first time on behalf of Boeing in the more than 20 years Europe and the U.S. had, in effect, instituted the home market rule.

“Specifically, how it would apply to us, we’re still trying to understand,” a Boeing Capital spokesperson told AIN. “But we’re always encouraged when the U.S. government talks about ensuring a level playing field.”

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ThomrEMB
on March 2, 2012 - 2:13pm

....too bad that every year is not a re-election year. It took an election year for the Administration to actually do something positive for the Aviation Industry.

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