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US pressure on EC regarding Boeing Merger Approval

  >From AllPolitics, regarding US pressure on the EC to approve the
  merger.  Jamie
  US wants Europe Backing on Merger
                      By BARRY SCHWEID
                      AP Diplomatic Writer
                      WASHINGTON (AP) President Clinton and senior aides
                      conducting a telephone campaign to head off a trade
  war with Europe
                      over its objections to the proposed merger of
  American defense giants
                      Boeing Co. and McDonnell Douglas Corp.
                      The immediate objective is delay of a meeting
  Wednesday at which the
                      European Commission's executive agency is widely
  expected to reject
                      the $15 billion deal, claiming it would stifle
  competition in aviation.
                      While EU officials in Brussels, Belgium, held out
  little hope Tuesday for a
                      last-minute compromise to defuse the threat of a
  trade battle, an
                      administration official here said there were signs
  of progress after the
                      flurry of telephone calls.
                      Clinton spoke to Jean Claude Juncker, the prime
  minister of Luxembourg
                      who is head of the European Council, and to Italian
  Prime Minister
                      Romano Prodi, said another administration official,
  confirming European
                      "I'd like to see a resolution of this," Clinton
                      And, he said, "I think there's a way to work this
  out. I'm hopeful that by
                      Wednesday, when the (European) Commission meets, an
  agreement will
                      have been reached."
                      The Federal Trade Commission, which approved the
  merger, is an
                      independent agency, and it has ruled that the merger
  did not violate U.S.
                      antitrust laws, Clinton noted before meeting at the
  White House with his
                      budget advisers.
                      "Indeed, the commercial side of the McDonnell
  Douglas business has
                      suffered with the rise of the European company
  Airbus," the president
                      In a campaign orchestrated by Daniel K. Tarullo, his
  assistant for
                      international economic policy, Secretary of State
  Madeleine Albright
                      telephoned German Foreign Minister Klaus Kinkel and
                      of State Stuart Eizenstat made other calls to
  European officials.
                      Luxembourg, because it is the current head of the
  European Council, the
                      United Kingdom and Germany were targeted for U.S.
  persuasion efforts,
                      said the administration officials, who spoke on
  condition of anonymity.
                      On Capitol Hill, meanwhile, a bipartisan group of 59
  lawmakers signed a
                      letter to European Commission President Jacques
  Santer expressing
                      concern about the EU's potential action against the
                      "The stand of the European Union is unacceptable to
  us," the lawmakers
                      The House members, who signed a letter drafted by
  Rep. Jack Metcalf,
                      R-Wash., whose district includes Boeing's main
  plants, also criticized the
                      EU's proposal that Boeing divest itself of
  McDonnell's commercial airline
                      "It is inappropriate to risk U.S. jobs because the
  free market worked its
                      will," they wrote, defending the merger on grounds
  that Untied States
                      must reduce the size of its defense industrial base.
                      "Because of the large defense business that will be
  conducted by the
                      Boeing Co., any action by the European Community is
  an infringement on
                      the sovereign rights of the United States to provide
  for U.S. national
                      security," the lawmakers wrote.
                      The pending European action could ban the American
  aviation giants
                      from doing business in the 15-nation European Union
  and confront them
                      with fines of up to $4 billion.
                      "There's an orderly process for our handling this,
  and I think we had
                      better let the orderly process play itself out
  before we talk ourselves into
                      a trade war," Clinton said when asked about the
                      While the FTC approved the $15 billion merger, an
  antitrust committee
                      at European Union headquarters in Brussels
  recommended last week that
                      the deal be rejected as an economic threat to
                      The Europeans fear a Boeing-McDonnell Douglas
  combination could
                      threaten the survival of Airbus Industrie, a
  European consortium and rival
                      in the global airplane market. European rejection of
  the deal could keep
                      the proposed company out of Europe's profitable
  aviation market.
                      (22 Jul 1997 14:04 EDT)
  James Love
  Center for Study of Responsive Law
  P.O. Box 19367 | Washington, DC 20036
  202.387.8030  | fax 202.234.5176
  http://www.cptech.org  |  love@cptech.org