One example of the perversion of current globalization policy is the United States Air Force (USAF) tanker competition. The Boeing 767 facility must be ITAR compliant, regarding business access and US employees, so that the aircraft can be sold to the military. The Boeing 767 also required a Berry Amendment waiver, because large shares of its parts are developed offshore, including parts that are manufactured in Russia. By Contrast, the Airbus KC-30 is exempted from the Berry Amendment because the law exempts production from certain allied nations.Interestingly, I don't think this is true. While the KC-30B is assembled in Toulouse, this rule may apply. But when the assembly line shifts to Mobile, Alabama, I think the same laws apply.
This issue came up in the same hearing last month that I quoted in my previous post today. At the risk of quoting John Young too many times in one day, here was the exchange between Young and Represenative Todd Tiahrt, a pro-767 lawmaker from Kansas.
REP. TIAHRT: You are waiving the regulations for the Europeans, by the way you just explained it to me. And in doing so you've created an unlevel playing field and an unfair advantage to one bidder over the other.
Ninety percent of the product is built in
Europe, and they don't have to comply with five specific regulations -- the cost accounting standards, the Foreign Corrupt Practices Act, the International Trafficking in Arms Regulations, the Berry Amendment, and the Buy American Provisions. Those are the five regulations that have been waived by the Department of Defense -- not Congress, by you guys. Are you going to force them to comply with them just like you do the American company? Because if you don't American workers are put at a disadvantage.
MR. YOUNG: Both bidders, both companies must comply with all the regulations and laws you just cited. Both of those bidders are reaching outside of their defense company headquarters to get commercial products. Both of those commercial product providers are not subject to some elements of all of those regulations you talked about.
But all the commercial products are subject to the same regulations and then the defense companies that are bringing those commercial products into and modifying them to deliver the
government a tanker are fully subject to all the regulations. And we will not be waiving regulations with regard -- (inaudible). U.S.
REP. TIAHRT: You will not apply these five regulations to 90 percent of one of the two bids. That's just what you've told me. You said the American portion -- well, fine. We'll apply the regulations equally for 10 percent of the product. But for 90 percent, we're going to make a disadvantage for American workers here by allowing no cost accounting standards, no Foreign Corrupt Practices Act, no International Trafficking in Arms regulations. Those are very expensive regulations to implement, and you're -- (audio break) -- implemented entirely on one body and you're waiving it entirely for 90 percent of another body. That is an unfair advantage.MR. YOUNG: We're implementing it uniformly to the two bidders.