President Donald Trump’s State Department will reportedly announce a new trade agreement with United Arab Emirates (UAE) on Monday, scoring a victory in a trade dispute over UAE’s subsidizing its two state-owned airlines to the detriment of U.S. airlines and workers.
Breitbart News reported how several foreign nations – including the UAE – have been subsidizing their nation’s state-owned airlines to the tune of $52 billion, in violation of “Open Skies” executive agreements that those nations have with the United States. For the UAE, the two carriers are Emirates Airlines and Etihad Airways. Those “Open Skies” trade agreements are designed to ensure free market competition between airlines, without government support.
The Trump administration acted on the issue after Breitbart News and other outlets brought the issue to light, with the State Department and Transportation Department pushing through an agreement that will protect U.S. workers and bolster America’s economy.
Sources close to the deal speaking exclusively with Breitbart News on condition of anonymity say that the United State and UAE are signing an agreement in private on Friday that will be announced on Monday, ending these subsidies and restoring a competitive environment for U.S.-based carriers.
The new trade agreement will include an explicit admission by UAE that subsidizing airlines harms foreign competitors, reversing three years of denying those accusations. The UAE also agrees to:
- Freeze any new “fifth freedom” flight routes, under which UAE companies could fly routes directly between the United States and other foreign countries, harming the ability of United, American Airlines, and Delta to compete in those same routes.
- Reporting any new transactions involving Emirates Air and Etihad.
- Requiring Emirates Air and Etihad to fully pay for new airport construction and development, which previously had been subsidized by the UAE government.
- Operating in a transparent manner according to international accounting standards, ensuring compliance with the terms of this agreement.
- Meet with U.S. representatives in one year to review the results of implementing the new agreement.
Any violations of this deal could result in the United States invoking Article 15 of the agreement, under which America could disallow any flights by UAE-owed airlines in the United States, with devastating consequences to those foreign airlines.
Experts estimate that the Trump administration’s new trade deal could protect as many as 1.2 million jobs which depend on a robust domestic airline industry.
This deal comes on the heels of the Trump administration’s success in January of getting Qatar to sign such an agreement. Unconfirmed reports are that Secretary of State Mike Pompeo will make the announcement on Monday regarding the UAE alongside the foreign minister from that nation during his visit to Washington.
Supporters of United, American Airlines, and Delta had tried for the final two years of Barack Obama to persuade his administration to do something about this issue. One year after President Trump took office, a new agreement has been reached, consistent with the president’s America First agenda.