A Moment of Clarity by Tom Donnelly

The writer Michael Kinsley once observed that in Washington a “gaffe” occurs when someone inadvertently tells the truth. If that is so, the World Trade Organization committed one of the largest gaffes in late memory with its recent ruling that European government “launch aid” to Airbus aircraft amounted to large-scale and illegal subsidies.

Well, duh.
That Airbus received such prohibited subsidies is, of course, an important issue of international trade. And although, speaking as a sometime passenger on Airbus planes, I applaud the willingness of European taxpayers to subsidize my traveling comfort (they make a nice plane in Toulouse), the WTO ruling brings a moment of policy clarity to an issue too often clouded and intentionally obfuscated. And, from a defense perspective, this clarity comes not a moment too soon, for the U.S. Air Force will soon choose whether to buy a new refueling aircraft based either on the Airbus A330—identified as one of the planes that received “launch aid”—and Boeing’s 767. That is, the competition is between a European government-directed consortium and an American private company.



One might argue that, like my traveling comfort, a tanker partially subsidized by European governments stretches the Air Force’s and the American taxpayer’s dollar. Or, more cleverly but more mendaciously, that local and state governments or U.S. defense contracts represent a subsidy for Boeing. Even if these analyses were true—and they are not—they quite miss the point. The two essential issues in the tanker decision are: one, the operational suitability of the competing aircraft; and two, the strategic importance of preserving the American defense industrial base. On both of these counts, the case for the Boeing tanker is overwhelmingly clear.



The key distinction between the 767 and A330 is that the Airbus is a significantly larger plane. Indeed, Airbus, for its own economic and market reasons, does not make a 767-sized aircraft. And, in fact, the fact that the Air Force has been forced to conduct a “competition” for the tanker job reflects its terrible mismanagement of the program, the illegal behavior of several of its senior acquisition officials, and a mindless, grandstanding vengefulness on the part of a few U.S. senators; the competition has been a penalty exacted for past wrongs, nothing more. Because it’s a larger plane, the A330 can haul around more fighter fuel. Nice in the abstract, but, at best, operationally irrelevant. And here’s a flash of insight: a larger aircraft costs more to operate! It weighs more! It needs a larger parking space! In sum, the Air Force rightly, originally identified the 767 as the only aircraft that met is refueling needs.



But the “launch aid” issue should also make clear the nature of the defense-industrial policy questions that the tanker decision—and, really, a host of looming and recent Pentagon program decisions—provokes. Whipsawed by nearly two decades of defense budget reductions, rapidly changing technology, and a shift in emphasis from high-intensity conventional conflict to irregular warfare, the American “arsenal of democracy” is in a state of chaos. Even more than Airbus and other European semi-private firms, the military aircraft and the overall defense industry are dependent upon government policy decisions. Except for a brief period during the 1990s, when the Clinton Administration summoned the will and the expertise to allow for a consolidation and restructuring of the defense industry, the U.S. government has largely been unable to make up its mind—or stick to its decisions—about how much and what kind of defense industry it wants. The Obama administration now combines an inbred hostility toward capitalism with either a special hatred of “merchants of death” or a curious lack of interest; it is notable that the $780 billion of supposed “stimulus” contained nary a nickel of funding for defense procurement programs, despite their clear Keynesian pedigree, the fact that American military systems are the best in the world (and one of the few reliable sources of export and high-value, well-paying unionized jobs) and—oh, yes—the fact that skipping a couple of generations of procurement leaves American forces with fewer and older systems.



Altogether, the WTO ruling makes it easier for the Air Force and the administration to do the right strategic, operational and industrial thing—alas, a decade later than planned—and to at last begin to replace the aging fleet of tanker aircraft that provide an essential element in American global military power.