Do you believe U. S. military contracts with Boeing amount to subsidies? Have these types of payments provided with unfair advantages? Justify your answer. First and foremost, we do believe that U. S. military contracts with Boeing are amount to subsidies. News stated that Boeing received at least $5. 3 billion in its improper subsidies in order to develop the Boeing 787 Dreamliner and other jet models. The funding of $5. 3 billion came from the U. S. Department of Defense according to the New York Times on November, 2011. In addition, the U.
S government also involved in giving subsidies back then in a huge amount which is reported more than $23 billion. The $23 billion subsidized from indirect government such as Pentagon and NASA for research and development purposes. Therefore, we might conclude that, our first impression on Boeing is, they are provided with those types of payments with unfair advantages. An indirect subsidies amount to huge numbers are typically is not the best way in healthy competition. We can says that Boeing is totally used it 100% link with the U.
S Government subsidies and not to rely on their credibility in managing aircraft manufacturing industry. Indeed, the U. S Government provided Boeing with tax breaks, infrastructure support and other incentives totaling billions of dollars show how dependent Boeing is with the U. S Government. All the incentives cost billions of dollars and huge amount of subsidies lead to unfair advantages for other players in aircraft manufacturing industry. Furthermore, it brings the industry to unhealthy environment in term of competitiveness.
In line with our opinions, the World Trade Organization (WTO) also condemned the huge amount of subsidies given by the U. S Government for the project of Boeing 787 Dreamliner. This reason is the subsidies can cause unfavorable effects to the international trade. WTO’s Agreement on Subsidies and Countervailing Measures (ASCM) stated that the subsidies to specific firms or industries from a government or other public bodies are prohibited. Thus, any attempts of government intervention on subsidizing can be considered as against the law.
