April 24, 2015 

Submission of Allan I. Mendelsohn in Response to the Request of the U.S. Government 

for Public Comment on the Issue of Foreign Government Subsidies to Foreign Air 

Carriers 

Following internet publication of the paper (“Restoring Open Skies: The Need To 

Address Subsidized Competition From State-Owned Airlines in Qatar and the UAE”). 

prepared by Delta, American and United Airlines and concerning the issue of whether 

subsidies are in fact provided by the Gulf nations of the United Arab Emirates (“UAE”) 

and Qatar to their airlines (Emirates, Etihad and Qatar), the U.S. Government has 

requested public comment on this critically important issue. In their well-researched 

paper, the U.S. carriers persuasively argued that such subsidies were in fact being 

provided in very substantial sums by those nations to their three airlines and that such 

subsidies were having a very adverse distorting impact on the marketplace and on the 

ability of the U.S. air carrier industry to operate successfully and profitably. 

While it is not appropriate to reach any definitive conclusions on this matter until 

the Gulf carriers or their governments are permitted to, and do in fact, reply, and while 

the issue will remain unresolved until that time, it is a fact that the U.S. carriers have 

been joined in this controversy by their major counterparts in Europe (Lufthansa and Air 

France/KLM). All of these airlines are now requesting, if not demanding, that the U.S. 

and other western governments take prompt and effective measures that will either 

substantially restrict and limit the operations of the Gulf carriers to the United States and 

other western destinations or will otherwise work to “level the playing field” so that the 

Gulf carriers do not enjoy and benefit from substantially more advantageous competitive 
 2 

operating conditions than those enjoyed by unsubsidized U.S. and other western 

carriers. In other words, in seeking “a level playing field,” the U.S. and other western 

air carriers are attempting to assure that government-provided subsidies do not skew 

the marketplace in favor of carriers enjoying those subsidies and against carriers that do 

not enjoy those subsidies and, hence, face unfair, if not destructive, competition in the 

market place. 

Attached to this submission is a speech that the author presented as a 

participant in a debate arranged this past February by the International Air Transport 

Association (IATA) as part of its annual Legal Symposium. In that speech, the author 

discussed the issue of Norwegian Air International (NAI) and whether it is a “flag of 

convenience” enjoying low and, hence, preferential tax advantages by incorporating or 

“flagging” in Ireland rather than in Norway (thus enjoying a 12.5% corporate tax rate in 

Ireland compared to a 27% rate in Norway). The author suggested that such an 

advantageous tax rate would in effect constitute a subsidy not unlike, for example, 

Middle East air carriers that, because they are government owned, presumably pay no 

corporate taxes at all. In addition – and this speech was given before the U.S. air 

carriers published their above-described paper – the author questioned whether Middle 

East carriers are also subsidized in other ways, not least of which would be the plain 

and simple -- but very valuable -- subsidies provided to Middle East carriers by the 

ExIm Bank in the United States and various export credit agencies in Europe. 
 3 

Because of its direct relationship to the matters being discussed here, and in 

response to the U.S. Government’s request for public comment, the author is including 

in this submission a full copy of his remarks at the IATA Symposium. Before turning to 

the contents of those remarks, however, the author wishes the reader first to focus on 

two collateral issues by way of an introduction to the principal issues as to which the 

U.S. Government is seeking input and comment. 

First, however admirable and laudable this effort by the U. S. Government is to 

attempt to explore the subject of Middle East government subsidies and how, if they 

exist, they could work to distort and undermine the objective of a level playing field for 

international air carriers, the fact of the matter is that the U.S. Government should be 

encouraged to treat this inquiry only as a short-term approach to the problem. As this 

author recommends in his attached remarks, the better approach, and especially for 

purposes of the long term, is to vest the International Civil Aviation Organization (ICAO) 

with the responsibility of very promptly investigating and regularly monitoring all forms of 

alleged and actual subsidies provided to all air carriers by their governments throughout 

the world. Moreover, lest this be deemed too novel of a proposal, the U.S. and other 

governmental authorities should keep in mind the express provisions of Article 54(i) of 

the venerated and venerable 1944 Chicago Convention, which provides as follows: 

 “The [ICAO] Council shall: 

 . . . 

(i) Request, collect, examine and publish information relating to the 

advancement of air navigation and the operation of international air 

services, including information about the costs of operations and 

particulars of subsidies paid to airlines from public funds” (emphasis 

added) 
 4 

Nothing can be more certain from this provision than that the framers of the 

Chicago Convention were not only well aware of the possibility that public subsidies 

might be given by governments to their national air carriers, but those framers also 

expressly desired and authorized the international community to keep careful track of 

“the particulars” about what subsidies were paid by which governments. To be sure, 

and because of the importance of the subsidy issue, this provision implicitly empowers 

individual governments, like the U.S. Government here, to initiate the instant inquiry 

and, if necessary, to take appropriate action to correct the issues being confronted. 

More importantly, however, the provision suggests that any inquiry undertaken by the 

ICAO Council ought not be limited only to Middle East carriers, but should rather be 

extended to all carriers throughout the world. In addition, the inquiry should be very 

promptly undertaken and conducted by ICAO or by such committee or body within ICAO 

as is designated by the ICAO Council. 

Second, following presentation of his remarks at the February 2015 IATA 

Symposium, the author was questioned by several attendees about two elements of 

the U.S. legal system and whether, in any examination of the overriding issue of 

subsidies granted by governments, these elements should be included. The two 

elements were: (1) the U.S. bankruptcy laws that allow U.S. carriers to file for 

reorganization under the U.S. bankruptcy laws and, in doing so, they can thus emerge 

as a new entity largely without debt; and (2) the Fly American legislation that allows the 

U.S. Government to require all of its employees, when traveling on U.S. Government 

business, to fly to their destinations throughout the world on U.S. flag carriers. The 
 5 

replies provided to both questions were relatively brief and simple: 

1) As to the bankruptcy laws, the fact of the matter is that the bankrupt 

airline’s ability to emerge from and otherwise avoid its debts (that caused its bankruptcy 

filing) comes not at the expense of, or from subsidies or funds given by, the U.S. 

Government but rather at the expense of stockholders and unsecured creditors. These 

individuals or entities, in losing their stock investments and their rights as creditors, 

provide the means and the money whereby the airline can begin anew debt free. In 

other words, the bankruptcy law is not a government-provided subsidy but rather, if you 

will, a “subsidy” provided by fellow Americans who suffer the loss of their stock 

investments and their rights as creditors. 

2) As to the requirements of the Fly American Act, not only do I personally 

see no “subsidy” in allowing the payor for transportation to select the carrier on which 

the payee can or will fly, but equally as important, with all the alliance and code share 

arrangements in existence today, it is possible, if not likely, that foreign carriers 

transport a sufficiently substantial number or percentage of U. S. Government 

employees such that the issue is no longer relevant. 

Nevertheless, and as I added, if ICAO does, indeed, undertake a sweeping 

investigation of all government-provided subsidies, it would be appropriate for the U.S. 

Government to list the two foregoing programs as “alleged” or “possible” subsidy 

programs and allow them to be examined or questioned as such. 
 6 

 All this now said by way of introduction, the text of the author’s remarks at the 

IATA conference follow: 

I. Introduction 

Allan I. Mendelsohn is a former Deputy Assistant Secretary of State 

(Transportation Affairs) of the U. S. State Department, an Adjunct Professor at 

Georgetown University Law Center and currently in his own private practice in 

Washington, D.C. He presented the following remarks as part of the “Grand Debate” 

held at IATA’s Annual Legal Seminar in Seoul, South Korea on February 27, 2015. 

************ 

First I would like very quickly but very sincerely to thank IATA and each of the 

sponsors of this conference for putting on such an excellent and educational seminar 

for all of us. It could not have been better done, and I am sure I speak for all of us when 

I say this. Second, I would like to thank Korean Air and the Korean people for being 

such totally marvelous, friendly and helpful hosts. It has been a true pleasure visiting 

and touring through your totally lovely and interesting country. 

That said, let me now quickly launch into my segment of this debate. I intend to 

raise and focus on three very controversial issues that are right now facing the 

international aviation community and that deserve extended discussion in this debate. 

These issues are: 

(1) the recent emergence of this carrier, called Norwegian Air international (NAI), 

that appears to be owned by Norwegian nationals but that is flagged in Ireland - most 

everyone believes in order to be able to enjoy Ireland’s tax haven status and its lax 

labor laws; 

 (2) the growing problem of governments that hugely subsidize their airlines - 

whether by direct subsidies of different sorts or by not imposing on their airlines any 

form of corporate or other comparable income tax; and, finally, 

(3) the increasingly controversial U.S. Export-Import Bank (“Ex Im Bank”) 

“subsidies” given to international airlines to buy large new Boeing aircraft even though 

these airlines are anything but “developing” and are, indeed and for the most part, very 

profitable and, in a word, “rich”. Needless to say, no one would have ever contemplated 

or predicted that such airlines would be the recipients of subsidies to purchase new 

aircraft, while US and other national carriers pay the full price. But let me get into these 

details later and let me start first with the highly controversial subject of NAI. 
 7 

I. NAI 

Many of you are aware of the speech I gave last year at an air law conference at 

American University in Washington, DC. The speech was later published as an article 

in SMU’s Journal of Air Law and Commerce.1

 I understand that it’s been widely read, 

but If any of you have not yet read it, I brought a few copies with me and would be 

pleased to provide you with one. In any event, in that article, I took the open position 

that NAI is nothing more than a “flag of convenience”, no different from the flags of 

convenience in maritime law that destroyed the once very dominant and powerful 

American flag fleet that emerged and that largely governed maritime commerce in the 

first decade or so following the end of the second world war. 

By the mid to late 1960s, as I said in the article, that fleet, once operating totally 

under the US flag and employing American seamen-employees, was totally nonexistent. Their US owners had been permitted by the United States Government to 

freely reflag all of their vessels to countries like Panama, Liberia and Honduras, which 

imposed no corporate taxes of any sort (instead of the US 35% corporate tax) and 

allowed the owners to discharge all their US seamen employees and hire in their place 

low-paid un-unionized South American and Asian seamen. As a result of all of this, 

there are today no US-owned, US-flagged vessels plying the blue water commerce; and 

no less than 55% of the ocean carriers operating around the world today are flagged in 

obscure, sometimes even landlocked, small “flag of convenience” nations. Needless to 

say, this is exactly what I do not want to see happen in international aviation. 

Now let’s take a closer look at NAI. It is reflagging from Norway, with its 27% 

corporate tax rate and its enforceable labor laws, to Ireland that openly prides itself on 

being a “tax haven” state with a corporate tax rate of only 12.5% and virtually nonexistent labor laws. This alone should be enough to prove that Ireland may well be the 

new and first flag of convenience country in international aviation. But the situation 

seems to get worse, as just recently we’ve read stories about Ireland’s increasingly 

popular secret tax deals, known locally as the “Double Irish”, where foreign corporations 

that reincorporate in Ireland are given even lower and of course still secret tax rates. So 

frankly, it may not be an easy task to ascertain what tax rate NAI (or, for that matter 

Ryanair) will enjoy. 

To be sure, the European Commission (EC) now seems to have woken up to the 

issue and has declared that it is investigating Ireland’s “Double Irish” and will 

presumably be taking steps to rectify the situation. But within days of the disclosure of 

the existence of the “Double Irish” in Ireland, we were next to learn that the Netherlands 

has a so-called “Dutch Sandwich” by which the Netherlands too reportedly provides 

very substantial tax reductions, again all secret, to foreign corporations that re-register 

in the Netherlands. And as recently as this past November 7, the New York Times 

carried a lengthy exposé about the pervasive extent of tax cheating that goes on in 

Luxembourg, a country previously thought to be open and above board at least on tax 

issues. 

 

1

 Mendelsohn, Allan I., “Flags of Convenience, Maritime and Aviation”, 79 JALC 151 (2014). 
 8 

Two comments should be made about this. First, instead of the EC spending so 

much time pushing the US to allow NAI to operate, the EC would be far better advised 

to be spending its time cleaning up the deplorable tax mess that seems to be engulfing 

so many countries in Europe. And the second comment is that the EC needs 

desperately to do this not only to restore some decency or legitimacy to the tax picture 

in Europe but even more so to make sure that, if the US were ever to allow NAI to 

operate, EU countries like Latvia, Estonia or even Luxembourg or the Netherlands might 

well not fashion their own tax laws, secretly or otherwise, so as to be even more 

attractive as a corporate tax haven than Ireland. It is precisely such a “race to the 

bottom” that occurred and moved very quickly in maritime law some half century ago; 

and, as I said, the last thing I would like to see is a similar “race to the bottom” 

happening in international aviation, whether within the European Union or elsewhere in 

the world. 

A final word should be said on the issue about labor conditions, especially as that 

is the issue upon which the US and EU pilot unions argue that there is a clear violation 

of Article 17 bis of the US/EU Open Skies Agreement. If anyone doubts just how 

deplorable Ireland’s labor laws are at least as they apply (or do not apply) to the 

employees of Irish-flagged Ryanair, please peruse footnote 4 of my article that I 

mentioned earlier.2

 It sets out citations to four extremely critical articles about Ryanair’s 

labor relations; and there are no fewer than at least 20 other articles readily available of 

similar import. 

The long and short of my conclusion is that there can be no doubt but that NAI is 

a flag of convenience whose approval by the U.S. Government would almost surely lead 

to the emergence of other flag of convenience airlines and an inevitable race to the 

bottom just as occurred in the world of maritime commerce. I strongly and sincerely 

encourage the US Government to take every step to make sure that this does not occur 

in international air transportation. 

I do not like to leave a controversial subject like this one without at least 

advancing some suggestions as to how the problems we’ve discussed can be solved in 

some fashion or at least what next best steps we might be advised to take towards a 

solution. First, I think it is absolutely essential that, as I said, the EC must move itself: 

(1) to take major and very prompt steps to get its tax act together, to remove incentives 

for the kind of tax cheating that now seems to be running rampant throughout the EU, 

and, if at all possible, (2) to establish and enforce a uniform corporate tax rate, say 

perhaps of 20% or 25%, to apply throughout the EU or at least throughout those 

countries that use the Euro. If the EU does not believe it has such powers, perhaps the 

EU and the US might give thought to a multilateral treaty establishing such a uniform tax 

rate between the two - perhaps just for airline companies or possibly even for all 

corporations. Nor are these off-the-wall recommendations; I am certainly not the first 

one to think of them; and there’s no reason why one or both ought not at least be 

seriously explored. 

Moreover, if it should ultimately turn out either that the EU has no power to move 

in such a direction or that the US and the EU are unable to reach such a multilateral 

 

2

 See footnote 1 supra, 79 JALC at p. 154, fn. 4. 
 9 

agreement, then and especially if the EC continues to push the US on NAI, it may well 

be time for the US Government to fall back on the less cooperative remedy, namely, for 

the US to give very serious thought to withdrawing from or cancelling the US-EU Open 

Skies Agreement altogether – or at least until such time as the EU can vest itself with 

authority to take the kind of decisive action that is now so essential in these 

circumstances. 

I should say a few words about such a seemingly serious step; and these words 

will be as applicable to the next subject I shall be discussing as this one. Despite the 

fact that so many who favor NAI regularly call the Open Skies Agreement a “treaty” -- 

carrying with it the suggestion that denunciation would, therefore, be almost unthinkable 

-- the fact of the matter is that it is nothing more than an executive agreement that can 

be cancelled or otherwise terminated easily with no advance treaty requirements and 

simply with notice of one year given by either of the contracting parties to the other. 

I happened to have been one of those US Government officials who in the 1960’s 

moved the US Department of State and other US agencies and departments to agree to 

denounce the treaty known as the Warsaw Convention, which we felt at the time ran 

totally counter to U.S. values with its antiquated $8,300 limit on personal injury and 

death of passengers in international air transportation. While we ultimately withdrew that 

denunciation -- mainly because our colleagues in IATA, and its then General Counsel, 

Julian Gazdik, came up with the uniquely inventive and satisfactory 1966 interim carrier 

agreement -- I certainly learned from that experience how much more difficult it is to 

denounce a treaty than a mere executive agreement. So when supporters of NAI call it 

a treaty and try to attach to it some level of force of law, they should recall that it is not a 

treaty and can, therefore, be cancelled or terminated almost without effort. Let me only 

add that I would much prefer not to be forced to do so. But if it is a question of either 

accepting NAI or cancelling the US-EU Open Skies Agreement, there is absolutely no 

doubt in my mind that I would unhesitatingly encourage the US Government to cancel 

the agreement. 

II. Subsidies 

I would now like to turn my attention to the second argument, this one about 

subsidies. And I want to begin this discussion with an open admission and apology. I 

have absolutely no facts upon which to base an argument that certain airlines operating 

today in the world are heavily subsidized by their governments. The unfortunate fact is 

that there is no governmental or non-governmental organization anywhere in today’s 

world that in any way monitors or collects data or facts or figures on the extent, if at all, 

by which airlines might be subsidized in one or another way, directly or indirectly, by 

their governments. 

Indeed, the world does not even have any data or information about the extent to 

which airlines are allowed by their governments to operate free of any corporate or 

other forms of required tax payments to their governments. In other words, in most 

cases, we cannot even ascertain whether an airline pays taxes to its governments or, if 

it does, the extent or percentage of such payment(s). 
 10 

I also want to mention the fact that, whenever anyone in the US today complains 

about the unfairness caused by possible subsidies, tax advantages, or other types of 

support given by foreign governments to their airlines, they are always and invariably 

accused of being a “protectionist”. Frankly, I prefer to use another term, namely, “level 

playing field”. It is not, and I repeat, not by any means “protectionist” to demand that 

your competitors operate and compete on a playing field that is level for everyone or at 

least as level as possible for everyone. 

Now let me return to the issue of tax preferences as subsidies. We all now know, 

of course, that Ireland maintains a 12.5% tax rate on its books, but we have no idea 

whether Ryanair or NAI might be able to enjoy special tax advantages or refunds under 

the secretive so-called “Double Irish”. So, while we might be aware of statutory national 

tax rates (e.g., 35% in the USA), we have no idea as to the extent to which airlines are 

in compliance with such rates or can avoid them with special (often undisclosed) 

deductions, discounts or rebates. I shall propose a remedy for this very significant – 

and total - absence of information later, but for the moment, let me focus on the broader 

issue of subsidies in general. 

I can say with some truth that I have heard senior officials at both Emirates and 

Etihad Airlines deny publicly and on the record that their airlines receive any subsidies 

of any nature from the Government of the UAE. Shortly after I made a similar 

admission in the speech that I gave at American University School of Law, however, I 

read an extraordinary comment that appeared in the Aviation Daily and that I quoted in 

footnote 7 of my article.3

 I would like to read that footnote now, because I believe it to 

be of critical importance. 

The speaker was Amer Hadidi, President and CEO of Royal Jordanian 

Airlines. As he was quoted in the Aviation Daily of April 28, 2014, he openly railed at 

the harsh “reality” that his airline had to face because of the – and here is the important 

part of the quotation: 

“strong government subsidy policy of the UAE and Qatar for their airlines – 

Emirates, Etihad and Qatar Airlines – for fuel, airport charges and capital 

improvements”. Hadidi then added that “there is nothing we can do about it, 

we have to face it”. 

Now this is not a spokesman from Delta or American Airlines. It is a spokesman 

from a fellow Middle Eastern airline; and his very accusatory statement, therefore, must 

not only be widely heard and credited, but it must also require us to move forward and 

conduct a real and intensive investigation into whether or not these Mid-East airlines are 

or are not being subsidized. Depending on what this investigation discloses, and if it 

does appear that certain airlines are in fact enjoying significant subsidies and tax 

advantages from their governments and that these subsidies and advantages are not 

about to be terminated, we may well find ourselves, not unlike the situation of NAI, with 

no acceptable alternative other than to cancel the Open Skies Agreement and impose, 

in its place, very serious flight restrictions. 

 

3

 See fn. 1 supra, 79 JALC at p. 156 fn. 7. 
 11 

But before any of us needs to think about such a serious confrontation, I would 

much prefer to discuss and recommend the alternative path that I firmly believe the US 

and others must pursue as soon as possible, namely, that it is now very clearly the time 

for the US and other major western countries to call upon and invest ICAO with 

unlimited authority to immediately begin the process of collecting all the facts and 

statistics about all forms of airline subsidies, including their payment (or non-payment) 

of taxes. 

Many of you may have seen the recent issue of the quarterly magazine, Air and 

Space Lawyer, edited by our good friend and colleague, David Heffernan, who is with 

us today. Anyway, the issue contained an excellent article by Mr. Ruwantissa 

Abeyratne, who, as many of you know, served ICAO as one of its principal and 

extremely able legal officials for almost 25 years.4

 He recommended that ICAO be 

given a role as an economic regulator of air transport; and I can say that I agree with 

him totally that ICAO should be given such a role, including the specific task and 

responsibility of collecting all the facts and statistics about airline subsidies, including 

corporate taxes. 

It will not be easy for ICAO to succeed in this effort. But if we are ever to make 

any progress in achieving that elusive goal of a level playing field, the air transport world 

must begin somewhere to assemble this increasingly important data; and there is 

certainly no organization that has a better proven track record for success in the 

aviation world than ICAO. And we absolutely must gain full knowledge in this critically 

important area, because it is essential that airlines be required, to the extent possible, to 

operate on a relatively level playing field -- lest the world be forced to consider such 

world trade-related phenomena as “countervailing duties” and comparable sanctions to 

counter unfairness. 

Let me say as a word of conclusion that the continuing absence of such a level 

field not only means an increasing number of bankruptcies among western airlines, but 

it will also necessarily mean major and continuing persistent confrontations among 

airlines and governments in the days and years ahead.5

 

4

 Abeyratne, R, “Should ICAO Have a Role As An Economic Regulator of Air Transport”, 27 Air and 

Space Lawyer, No. 1 at p. 8 (2014). 

5

 Following the presentation of this speech in Seoul on Friday, February 27, 2015, newspaper articles 

began to appear in the US press about American, United and Delta Airlines joining forces in openly 

complaining, and providing some 55 pages of supporting data, to the US Government, about the 

subsidies given by the Governments of the UAE and Qatar to their carriers, Emirates, Etihad and Qatar. 

On or about March 9, 2015, the carriers placed their supporting documents and statistics on line at: 

www.openandfairskies.com. The papers are a “must” read and have since provoked a major and 

continuing confrontation between and among the officials of the carriers on both sides of the issue. 

Lufthansa and Air France/KLM have also since announced their agreement with the position of the US 

carriers, who argue in their document that the three Middle Eastern carriers have received no less than 

$40 billion in subsidies in the past ten years. Meanwhile, the CEOs of both Emirates and Etihad have 

again publicly and categorically denied that their airlines are subsidized. See “Gulf Airlines Deny Getting 

Unfair Aid”, Wall Street Journal, 3/18/2015, at p. B-8.
 12 

III. Ex–Im Bank Subsidies 

The final subject I wish to debate is one that I think is very well known and 

perhaps even not subject to dispute. My discussion, therefore, will be very short. The 

subject is the extraordinary competition in subsidies that are provided by the Ex-Im 

Bank and by various European Export Credit Agencies (ECAs) to subsidize lower-cost 

financing for the purchase of Boeing and Airbus aircraft by major, very well-capitalized 

foreign carriers - including, once again, those from the Middle East. Why such wellcapitalized foreign airlines should be receiving such subsidies when their U.S. and 

European competitors are not defies explanation - at least for me. 

These subsidies are given not just to allow new airlines from emerging countries 

to buy single-aisle jet aircraft (a subsidy I would support and encourage) but they are 

given to facilitate the purchase by well-capitalized foreign carriers of wide-body aircraft, 

including the largest and most costly aircraft that Boeing and Airbus 

manufacture. Frankly, it seems absolutely inconceivable to me that the United States 

Government would ever condone such substantial subsidies given to the very same 

well-capitalized foreign airlines against which the U.S. carriers must compete. 

Moreover, you should all be aware that a 2 1/2 to 3% reduction in an interest rate can 

mean a savings of as much as US$20 million on a wide-body aircraft. 

I frankly know of no one with whom I’ve exchanged views on this subject who 

supports such subsidies. But they are vigorously defended by both Airbus and Boeing 

on grounds that, if one or the other does not offer – or is prohibited from offering - the 

subsidy on the sale of its aircraft, the purchaser will simply walk across the street and 

buy the competing aircraft from the other manufacturer - thus allegedly causing heavy 

job losses and profits for the manufacturer that did not offer the subsidy. 

The reply to all of this is so simple and obvious that I can only be amazed no one 

has seriously suggested it to date – a multilateral treaty between the US and the EU 

outlawing and prohibiting all such export credit subsidies except when given to airlines 

of developing countries. And needless to say, I have absolutely no doubt but that all the 

major airlines in both the US and the EU would enthusiastically support this solution. 

Moreover, to the extent manufacturers from third countries begin to find 

themselves called upon to provide such subsidies for any of their newly produced 

aircraft, those countries can be moved to join the US-EU multilateral treaty. Such an 

approach would help to put all western and other developed-country air carriers on a 

level playing field – which, as I have said repeatedly before, is a goal that we must 

achieve if we are to have any hope of avoiding serious escalation of various forms of 

unilateral retaliation in the days and years ahead.