Our nation has a rich history of advancing trade policies that embody the virtues of the free market, a commitment to human rights, and the core principles of America’s founding. International trade has been a cornerstone of our nation’s economic success and exceptional nature.
Trade agreements only work, however, if both parties abide by the rules. A glaring example of how Americans are hurt when trade deals are not enforced is happening with our Open Skies agreements. These bilateral agreements between foreign countries and the United States govern international flight routes and are intended to benefit businesses and consumers alike. But in recent years, three Middle East government-owned airlines – Emirates, Etihad Airways, and Qatar Airways – have violated Open Skies policy by ignoring the terms that explicitly prohibit mass government subsidies to airlines. This trade cheating is offensive and harmful to the American people – it puts over 1.2 million American jobs at risk. Such a loss would be devastating to the American economy.
These three Gulf airlines are all heavily subsidized – investigators have proven to the tune of more than $50 billion! – by the governments of Qatar and the United Arab Emirates. In fact, without subsidization, these airlines would not be operable – they would be swimming in debt’s red ink. Government subsidies, especially on this scale, dramatically distort the market. The three airlines fly routes that are not profitable, for the exclusive purpose of driving out the competition, with their government backers covering their losses. If we don’t act, the Gulf carriers could eventually dominate flights to and from the U.S., and set prices however they please.