UPDATE 2-Top US lawmaker eyes subsidy review on tanker deal
(Adds details, WTO dispute)
By Jim Wolf
WASHINGTON May 14 (Reuters) - The head of the U.S. House of Representatives Armed Services Committee is conditionally seeking a review of any illegal subsidies' role in a $35 billion refueling-aircraft contest lost by Boeing Co (BA.N: Cotización), a committee aide said on Wednesday.
On Feb. 29, the Air Force picked a team made up of Northrop Grumman Corp (NOC.N: Cotización) and Airbus parent EADS EAD.PA, rather than Chicago-based Boeing, to start building a new fleet of tanker aircraft based on Airbus's A330 aircraft.
Panel chairman Ike Skelton, a Missouri Democrat, has prepared legislation that would mandate an Air Force review if the World Trade Organization finds fault in a subsidy dispute pitting Boeing against Airbus, its rival in the commercial aircraft market.
If WTO rules an illegal subsidy was given to "any large commercial aircraft manufacturer," Skelton's legislation would require the Air Force look at the potential impact of that subsidy on the tanker program's selection process, the aide said.
"If the Air Force determines that the subsidy did impact the competition, then it must find a way to remove the impact from the competition to ensure the fairness of the process," a summary of the plan said.
Skelton's legislation was expected to be adopted by the Democrat-controlled Armed Services Committee in a matter of hours as part of its fiscal 2009 defense authorization bill. The committee was working late into the night.
The Senate Armed Services Committee, for its part, steered clear of the issue in its version of the bill. The two must be reconciled before legislation may be signed into law by the president. Continuación...