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Suggested Citation:"Providing More Flexible and Timely Response." National Research Council. 1985. The Competitive Status of the U.S. Civil Aviation Manufacturing Industry: A Study of the Influences of Technology in Determining International Industrial Competitive Advantage. Washington, DC: The National Academies Press. doi: 10.17226/641.
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GROWING GOVERNMENT INVOLVEMENT IN TRADE 80 obviously should be taken only after active negotiation to induce nonsignators to join indicates the futility of other measures and with careful consideration of the consequences. It chief value would be as a threat. The panel also recommends more vigorous data collection, monitoring, assessment, and enforcement of the GATT agreement by government personnel for all segments of the aircraft industry, not just large commercial jets. Enforcement could be facilitated by a higher degree of coordination among the U.S. agencies most directly involved in implementation—the United States Trade Representative's office, the Department of Commerce, the Department of State—and those agencies responsible for related, and frequently conflicting, policies—the Department of State, the Department of Defense, and the National Security Council. Providing More Flexible and Timely Response Foreign support of R&D, risk capital, and export finance are indicative of a larger policy issue, namely, the desire of foreign governments to support the development of an indigenous aircraft industry using economic criteria that are not applicable to private firms in the United States. Agreements aimed at controlling government subsidization of indigenous industries inevitably can be evaded, given a political will to do so. However, the U.S. government should continue to pursue such agreements for the reasons that have been indicated. Nonetheless, in the final analysis, it may be necessary to develop U.S. policies that recognize the "targeting" of the civil aircraft industry by foreign governments and that reflect the broad national security, economic, and social interests served by a healthy U.S. aircraft manufacturing industry. Said another way, it is desirable to recognize that economic and social interests are important dimensions of national security along with the obvious dimension of military strength. The transitory nature of many of the most flagrant foreign government trade policies and the problems of large individual orders and first-sale leverage, noted earlier, suggest the importance of timeliness and the need for a variety of potential responses in formulating and administering U.S. trade policy— responses that can vary in strength, in length, and in the nature of their administrative implementation. Options could include much closer coordination of U.S. military development and procurement practices with industrial need, tighter and more extensive integration of NASA with civil R&D, as well as more aggressive U.S. export finance policies.

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Deregulation, higher costs, foreign competition, and financial risks are causing profound changes in civil aviation. These trends are reviewed along with growing federal involvement in trade, technology transfer, technological developments in airframes and propulsion, and military-civil aviation relationships. Policy options to preserve the strength and effectiveness of civil aircraft manufacturing are offered.

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