Boeing adds its crafted support

By Caroline Overington
New York

August 7, 2004

When a big company like Boeing gets behind the free trade agreement, people naturally think: so, what's in it for me?

The answer, surprisingly, is nothing, at least, not immediately. There are no impediments to trade on aircraft. Boeing can sell its planes to, say, Qantas, without having to pass on a tax.

"We don't support the free trade agreement because we are immediately going to be better off," said Boeing's Ted Austell from Chicago yesterday.

"That is true for some companies. The trade barriers will drop, and their products will become immediately cheaper. That isn't true for us, but we still see a great many benefits in the trade agreement, which is why we were one of the first to support it."

Boeing supports the FTA - aggressively supports it, actually - because it believes there is a link between free trade and the sale of commercial aircraft.

"Whenever a nation removes its impediments to free trade, you see an immediate and dramatic improvement in the economy," Mr Austell said.

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"That means GDP goes up, and when it goes up, so does demand for aircraft."

In other words, nations with strong economies need more planes than those with weak economies: the people who live in countries with strong economies travel more often, for pleasure and for business.

Boeing has plotted the link between free trade, robust economies and demand for planes "and it's obvious, and impressive", Mr Austell said.

For this reason, Boeing was one of the first American companies to strongly back the FTA. Its senior executives lobbied US Congress and President George Bush. "We support global free trade, because 70 per cent of our products are exported," Mr Austell said.

Australia is one of Boeing's best customers. Qantas flies 150 Boeing planes, most of which are made in the US. The Australian Government buys military aircraft from Boeing's offshoot, Hawker de Havilland.

Mr Austell said Boeing had invested $A350 million in local facilities, plant, equipment and the training Australian nationals; $A200 million in research and development; and $A100 million in technology. The company has exported $A2.5 billion worth of complex aerostructure components from Australia.

Boeing has 3000 of its 150,000 employees in Australia. Mr Austell said Boeing believed Australia would be worth about $US20 billion ($A28 billion) in "potential opportunity over the next 20 years".