Airbus and Alabama — New Foreign Investment into States — Should this be a top priority for economic development and jobs in the U.S., You think?

Airbus has just announced the building of a $600 million plant in Alabama for production of the A320. This will generate 1,000 new jobs. This doesn’t counter sub-contractors and vendors rushing to supply the new facility.
Here’s a few interesting points:
…. Airbus finally realized through its litigation against Boeing in the WTO the lucrative nature of state and county incentives in the U.S.
…. Airbus will be in a better position to compete to sell to American carriers and to compete for U.S. government contracts (mainly military).
… The workforce and right-to-work laws throughout the South are huge competitive advantages. (Didn’t Boeing just relocate one of its plants to the region?)
…. New foreign direct investment and expansion of existing foreign operations is a great multiplier for economic development and job creation. It increases employment by the new facility and even newer ones relocate to supply it, without any state incentives. (Of course, all the new workers coming into the state and the newly employed ones buy everything from cars to homes.)
…. New foreign direct investment avoids the counter-argument against state incentives that they only rob one state to the advantage of another. (The “Beggar-thy-Neighbor counter- argument.)
My conclusion, given the globalized world, the slowdown in Europe, the need for European and Asian multinationals and manufacturers to engage in the largest economy in the world (the U.S.), and the ability to avoid any existing or new U.S. trade restrictions, it make good sense for the federal government and state governments to aggressively target foreign investment as a potential silver bullet to get us out of our mess.
Seems like a good argument.

About Stuart Malawer

Distinguished Service Professor of Law & International Trade at George Mason University (Schar School of Public Policy).
This entry was posted in Global Trade Relations and tagged , , , , , , , , , , , . Bookmark the permalink.

Leave a Reply

Please log in using one of these methods to post your comment: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s