In “All Politics Is Global,” I examined the politics of regulatory standards in a globalized economy. The argument is straightforward. The power to set standards is a significant one in the global economy, and the key source of that power comes from consumption and not production. Large-market jurisdictions have the ability to set standards that can dominate the rest of the world.
When the book was written in 2007, the jurisdictions that mattered were the United States and the European Union. If they agreed on a common regulatory rule, that became the global standard. If they disagreed, the result was an outcome of rival standards or sham standards. I noted in the conclusion, however, that this bipolar world of global regulation was changing: “The increased number of great powers also implies reduced market and coercive power for each core state vis-a-vis the rest of the world. Therefore, as the distribution of economic power increases, so should regulatory divergence.” The next few paragraphs consisted of fancy academic prose saying “*COUGH* China *COUGH*”
This brings us to the Boeing 737 Max 8, and the increasingly circumscribed power of the United States in global regulation.
You might have heard that Boeing’s new plane has had some issues in the past six months. There have been two crashes immediately after takeoff, one in Indonesia last year and one in Ethiopia last weekend. CNN interviewed the CEO of Ethiopian Airlines and found out that the pilot experienced “flight control problems.”
This is obviously a huge problem for Boeing, which has done well with with the 737 Max because it is a lighter, more fuel-efficient version of the 737, a classic short-haul plane. As the Guardian’s Gwyn Topham put it, the 737 Max “replicated what airlines had already got, only better, lighter, and cheaper to fuel and maintain.”
Still, the Dallas Morning News’ Cary Aspinwall, Ariana Giorgi, and Dom DiFurio reported some disturbing news about pilot problems with the 737 Max:
Pilots repeatedly voiced safety concerns about the Boeing 737 Max 8 to federal authorities, with one captain calling the flight manual “inadequate and almost criminally insufficient” several months before Sunday’s Ethiopian Air crash that killed 157 people, an investigation by The Dallas Morning News found....
The disclosures found by The News reference problems during Boeing 737 Max 8 flights with an autopilot system, and they all occurred while trying to gain altitude during takeoff — many mentioned the plane turning nose down suddenly. While records show these flights occurred during October and November, the information about which airlines the pilots were flying for is redacted from the database.
Records show that a captain who flies the Max 8 complained in November that it was “unconscionable” that the company and federal authorities allowed pilots to fly the planes without adequate training or fully disclosing information about how its systems were different from previous 737 models.
That sure sounds like a problem that regulators should address, but this being the United States under the Trump administration, there are ways around that problem. According to the New York Times’ Keith Bradsher, Kenneth Vogel and Zach Wichter, Boeing CEO’s sprang into action by phoning up the only person who matters in this administration:
Early Tuesday, Dennis A. Muilenburg, the chief executive of Boeing, spoke to President Trump on the phone and made the case that the 737 Max planes should not be grounded in the United States, according to two people briefed on the conversation....
Mr. Trump jumped into the fray on Tuesday morning, posting Twitter messages deploring what he described as the technological complexities of modern commercial aircraft. “Pilots are no longer needed, but rather computer scientists from MIT,” Mr. Trump said. Much of what he asserted, however, was misleading or lacked context, aviation experts said.
The Boeing chief, Mr. Muilenburg, in his conversation with the president reiterated that the plane was safe, outlining the company’s position. He also updated Mr. Trump on the status of the 737 Max models. The call came after the Mr. Trump’s tweets, but was in the works the night before, according to one of the people.
Politico’s Bob King reports that, “the White House has been in 'constant contact’ with the FAA about the issue.” The Times story also suggests that Canadian regulators are following the lead of the United States, which makes some sense given the number of flights between the two countries.
This is a story, however, in which it increasingly appears that the United States will lose. Because as my Post colleague Gerry Shih reported on Tuesday, China has some weight it can throw around as well:
When China on Monday became the first country to order all Boeing 737 Max 8 planes grounded in the aftermath of an Ethiopian Airlines crash Sunday, its aviation regulator sent an unmistakable signal: The U.S. Federal Aviation Administration is no longer the only authority in civil aviation worldwide.
After China ordered a dozen carriers to ground their 96 planes — about a quarter of all 737 Max aircraft in operation globally — authorities in Ethiopia, Indonesia, Mongolia, Morocco and Singapore quickly followed suit, along with carriers in Latin America and South Korea.
Despite the FAA issuing a statement backing the Boeing jet’s airworthiness, the European Union grounded the model Tuesday, as did at least 10 other countries, with authorities saying the aircraft would not be allowed to fly to or from their countries pending the investigation.
And that is pretty much the ballgame. If the European Union and China are grounding the 737 Max, that affects two-thirds of those planes. The standard has been set. Blogging at the Monkey Cage, Ashley Nunes writes, “the swift action from the E.U., together with tweeted complaints from President Trump, may transform a regional market crisis into a global one.” The United States might try to ignore it, but with Congress starting to make noises on this issue and passengers sounding jittery, the odds of U.S. regulatory action are excellent.
The contrast with the past is stark. As King reported in Politico, “The cascade of groundings represents a break from decades of other countries largely following the FAA’s lead on the safety of U.S. aircraft.” The lack of a permanent head of the FAA can’t help U.S. credibility on this issue (remember, Trump wanted to appoint his personal pilot to run the agency).
The United States still retains significant reservoirs of structural power. But in the arena of regulation, the United States is not even first among equals.