Is US aerospace competitive?

A US Presidential Commission on the Future of the US Aerospace Industry will focus on obstacles to US competitiveness.

In testimony before the US House Transportation and Infrastructure Subcommittee on Aviation, AIA President and CEO John W. Douglass said that US policy has not responded to the transition of US aerospace from being a primarily defence-driven industry, to that of a commercial one.

The future of the US aerospace industry depends on unfettered access to the global marketplace, he said, and the US national and economic security depends on its ability to overcome structural obstacles to that goal.

‘It is important to point out areas where our competitors have certain advantages from their governments, but we should focus our actions on those improvements to our American system of product development that will make us more competitive,’ said Douglass.

He said that the US aerospace industry is facing challenges from Europe for leadership in aerospace, which has fundamentally different views on the proper role of government in assisting industry. Douglass noted that subsidies and barriers, such as the unilateral effort by the European Union to bar US aircraft from European skies, regardless of their compliance with international noise standards, distort markets and puts American manufacturers and the US economy at a disadvantage.

Douglass also said that US internal policies create significant obstacles to US competitiveness in the global marketplace. He cited the US export licensing process, which is based on philosophical underpinnings fifty years old.

Douglass added that the aerospace industry was asking Congress for the rapid passage of an updated Export Administration Act and restoration of funding for the Export-Import Bank.

Douglass said another obstacle to competitiveness was the decline in aerospace R&D investment by the US government. Aeronautics research has dropped 40 percent in the last six years, a trend that continues in the latest budget submission for FY2002.

Douglass praised President Bush, however, for the increase in aerospace research in the 2002 defense budget. He noted that US investment in R&D has a direct impact on attracting people needed to maintain US leadership in aerospace.

The Presidential Commission on the Future of the US Aerospace Industry will focus on these obstacles to US competitiveness and make recommendations on the role of the US federal government on the aerospace industry, Douglass said.

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