OREANDA-NEWS. July 30, 2015. A new report says the subsidization of state-owned Qatar Airways, Etihad Airways and Emirates is putting 200,000 American jobs at risk, lending urgency to the many requests from airline employees, members of Congress, and business and community groups calling for immediate government action to protect the American economy.

Aaron Klein, a former deputy assistant secretary for economic policy at the U.S. Treasury Department, writes that “the effects of foreign subsidization are substantial and detrimental. Jobs that are lost do not come back. Portions of the industrial base can be eroded, thereby devastating companies, communities, and significantly impacting our national defense.”

Klein, who also served as chief economist for the U.S. Senate Banking, Housing and Urban Affairs Committee, continues: “Longer-run impacts can be unpredictable and have far further ramifications than originally anticipated. Put simply, a subsidized foreign industry can do significant damage to an American industry that can last for decades.”

The paper, entitled, “Decline in U.S. Shipbuilding Industry: A Cautionary Tale of Foreign Subsidies Destroying U.S. Jobs,” examines the systematic elimination of the U.S. domestic shipbuilding industry as a result of subsidized foreign competition. Klein’s analysis draws parallels to the present-day trade dispute with Qatar Airways, Etihad Airways and Emirates, which have received more than \\$42 billion in subsidies and other benefits from their government owners in the past decade, in violation of Open Skies agreements.

“The end of a level playing field in aviation, with U.S. companies facing direct competition from subsidized foreign carriers, is remarkably similar to what happened to U.S. shipbuilders in the 1980s. If these foreign carriers are indeed successful in shifting traffic from American companies to their own, then American aviation will suffer,” he writes.

Klein warns that the effects of continued inaction could be disastrous.

“[I]f the impact results in only one-quarter of the impact of what happened in U.S. shipbuilding,” he writes, “then you would be looking at job losses of almost 200,000 when considering direct losses in the passenger aviation business and among those jobs that are supported by passenger aviation.”

Delta is a member of the Partnership for Open & Fair Skies that has emphasized that subsidized Gulf carriers are distorting the global marketplace, harming the U.S. airline industry and threatening U.S. workers’ jobs. Sixty Delta front-line employees took this same message to Capitol Hill in June when they visited more than 200 Congressional offices to urge the U.S. government to open talks with the governments of Qatar and United Arab Emirates. 

“The end of a level playing field in aviation, with U.S. companies facing direct competition from subsidized foreign carriers, is remarkably similar to what happened to U.S. shipbuilders in the 1980s. If these foreign carriers are indeed successful in shifting traffic from American companies to their own, then American aviation will suffer.”