While everyone’s still excited about the loopy Republicans copping their “thumping”, it’s worth remembering they lost to loopy Democrats who can be just as dangerous. There’s already an example of that in a promise to shoot down a little liberalisation of the United States restrictive aviation policy.

The US and EU had been edging towards a “less-closed” skies policy in the US – open skies would be far too broad a term – but a Democrat rejoicing in the name of James Oberstar is set to kill it when he becomes chairman of the House transportation and infrastructure committee in January.

Oberstar has helped keep the reform in limbo for a year as he is opposed to a liberalisation of foreign investment in US airlines. As the Financial Times reports, the reform would not repeal the restrictions on foreign investment levels in airlines, but would just allow foreign investors a bit more say in how their money might be spent.

There are shades of the same protectionist streak that saw Dubai Ports prevented from taking over P&O’s American wharves. In the airline case, Washington repeatedly throws its weight around in trade negotiations to gain greater investment access and control for American companies, but baulks at offering a relatively small liberalisation of its own highly-protected aviation industry.

Given the track record of various American airlines, they could do with all the foreign help they could get.

It’s worth remembering that the trade reform achieved under President Clinton was very presidential in its impetus and not part of any general Democrat policy. Indeed, the traditional Democrat link with US organised labor tends to make the party more protectionist than the Republicans.

Peter Fray

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Peter Fray
Editor-in-chief of Crikey

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