Indefensible

Well, there's a surprise. The US has announced that the contract to supply new airborne tankers to the armed forces has been awarded to Boeing, beating off a challenge from EADS, the military counterpart of the European Airbus consortium.

It's a long and frankly depressing story, well told here in The Economist's Clausewitz column. Briefly, EADS won the bidding fair and square in 2008. The aircraft it offered was more expensive than Boeing's but had greater lift capacity. It also had the not inconsiderable advantage of actually existing, whereas the Boeing offering had never been off the drawing board, let alone off the ground. EADS would have created almost as many jobs in the US as Boeing, since it had partnered with Northrop Grumman.

Boeing raised a blizzard of objections to the initial result, and with an election in the offing (as it always seems to be in the US), it succeeded in reopening the process. Northrop Grumman became discouraged and walked away, leaving EADS on its own. The bidding rules were changed to make price almost the sole criterion, and lo and behold, still offering a smaller and largely hypothetical aircraft, Boeing has now emerged as the victor. The US is adamant that the result is fair, which can only be the case if you think that a losing bettor has an inviolable right to demand "best two out of three". EADS has the right of appeal, but there would hardly seemto be any point; the fix is in.

Boeing (and US politicians) have always argued that Airbus competes unfairly because it is subsidised by European governments. Airbus in turn argues that Boeing has unfair advantages in bidding on civilian aircraft because of all the US military business it gets awarded. There's no absolute right and wrong here, but there's no denying that in the case of the tankers, Boeing, even with all its natural advantages, was only able to win through political finagling and wrapping itself in Old Glory.

"Free trade"? "Fair competition"? Sometimes, those words mean whatever politicians, following the example of Humpty Dumpty, choose them to mean.