Brazil launches WTO complaint against Canada over Bombardier aid
- Author: Sonia Alvarado Feb 09, 2017,
Feb 09, 2017, 0:39
Brazil has formally taken its case against government financial investment in the Bombardier CSeries to the World Trade Organization (WTO).
The Québec provincial government past year invested $1 billion to take a 49% stake in the CSeries program.
After repeated delays and a doubling of its production costs to more than $5 billion, Bombardier delivered its first CS100 commercial planes last June, and its first CS300s at the end of the year.
The move comes just a day after the Montreal-based company announced C$372.5 million ($283 million) in repayable contributions from the Canadian government for development of Bombardier's C-Series aircraft and Global 7000 business jet.
For its part, Embraer applauded the Brazilian government's move, for which it has lobbied since the provincial government of Quebec granted Bombardier its own C$1 billion in loans past year.
But Joseph Pickerill, a spokesman for Canada's minister of global trade, said that "Canadian support measures to the aerospace industry, including to Bombardier, were developed in full knowledge of WTO rules and are consistent with these obligations". The company also sold a 30 per cent stake in its railway division to pension fund manager Caisse de depot for US$1.5 billion. That investment angered Brazilian aircraft manufacturer Embraer, Bombardier's prime competitor, and the company urged the Brazilian government to challenge Canada at the WTO.
"I am very much prepared to fight for what we are doing", he said.
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"In Brazil's understanding, Canadian subsidies artificially affect the worldwide competitiveness of the sector, in a manner incompatible with Canada's obligations to the WTO", Brazil's Ministry of Foreign Affairs said in a statement.
"It is essential to restore a level playing field to the commercial aircraft market and ensure that competition is between companies, not governments", Silva said in a statement.
Bombardier CEO Alain Bellemare was similarly defiant.
Bombardier spokesperson Simon Letendre said in statement emailed to CBC News that the company is "very confident that all forms of support provided to Bombardier.are fully compliant with Canada's worldwide trade obligations".
"We want good-quality jobs", he said on February 7.
The Brazilian government said the timing and location of talks with Canada should be agreed upon by the two countries in the coming weeks.