WASHINGTON, July 14 (UPI) -- U.S. Defense Secretary Robert Gates' announcement last week that the award of a gigantic $35 billion contract for 179 new U.S. Air Force jet tankers to EADS and Northrop Grumman (NYSE:NOC) has been nullified and will be re-competed is bad news for Sen. Barack Obama's presidential election campaign. But it could make trans-Atlantic life a lot easier for Obama if he wins the presidency in November.

By contrast, the decision was very welcome news for Obama's main rival, Republican presidential standard-bearer Sen. John McCain of Arizona.

Although Obama, D-Ill., has a clear record as a free-trader, he has moved to the protectionist left in his presidential campaign. Allowing the award of the air tanker contract to Northrop Grumman and its European partner, the European Aeronautic Defense and Space Co., to stand would have given Obama and Democratic congressional candidates all across the United States hot ammunition for the fall election campaign.

Sitting Republican senators and congressmen in districts and states with large numbers of jobs at stake in the program would have been particularly vulnerable.

Nullifying the award of the contract to EADS for its KC-45A air tanker, a modification of the A-330 Airbus, and putting Boeing's KC-767 tanker back in contention is therefore good domestic politics for the Republicans. The air tanker issue wasn't the biggest economic or business issue for Obama by any means, but it was clearly a potent one, and now it has been taken off the table.