The Hudson Institute has released a new report by Senior Fellow Thomas Duesterberg, who served as assistant secretary for international economic policy at the US Department of Commerce. In it, Duesterberg explains how Middle East airlines are violating the Open Skies agreements through subsidies from their governments, putting U.S. carriers at a competitive disadvantage.
The report looks into new developments on the issue, such as a 2019 EU rule that points the way for possible international cooperation using precedents for prohibiting subsidization by State Owned Enterprises (SOEs).
Duesterberg argues that the United States and its allies should vigorously pursue the guarantees of financial transparency and equal opportunity to compete accorded to their domestic air carriers by the open skies system—and give cautious but serious consideration to the pursuit of additional Open Skies agreements with China, which currently operates outside the system’s framework of rules.
The Partnership for Fair and Open Skies responded with the following statement, “The Hudson Institute's report further highlights how the Gulf carriers use massive government subsidies to undermine our trade deals, harm the U.S. airline industry and eliminate American jobs,” said Scott Reed, managing partner for the Partnership for Open & Fair Skies. “American workers are counting on our government to take a stand and fight back against these trade violations. For the sake of the 1.2 million U.S. jobs that depend on a strong U.S. airline industry, it is imperative that the Trump administration enforces our agreements and ensures that Americans aren't getting a raw deal.”
