Sun, Jun 11, 2017 - Page 16 News List

Bombardier sales might have hurt Boeing

BASIS FOR COMPARISON:Bombardier said it expected the ITC’s decision because it had set the bar so low for Boeing, but that a detailed review would nullify its claims

Bloomberg

A US trade court ruled that Boeing Co’s commercial jet business might have been harmed by sales of passenger planes by Bombardier Inc at less than fair value. The court decision allows Boeing to continue pressing for tariffs against its Canadian competitor.

The US International Trade Commission (ITC) on Friday ruled that there is reasonable indication that Boeing’s business might have been hurt or threatened by Bombardier sales in the US of its C Series jets.

The US Department of Commerce is investigating separately whether to impose duties on the Bombardier planes. A negative ruling by the ITC would have ended the two investigations. Before the US imposes any duties, the ITC would still have to issue a final ruling on how Boeing’s business was affected.

Boeing has accused Bombardier of selling its C Series jets in the US at “absurdly low” prices, while benefiting from unfair government subsidies in Canada.

The US planemaker asked the ITC in April to find that the company has suffered injury to its business at the hands of Bombardier, and to recommend that the commerce department slap duties on the C Series.

The tussle echoes longstanding US-Europe disputes stemming from the rivalry between Boeing and Airbus SE.

A WTO panel on Friday found that billions of US dollars in government subsidies that flowed to Boeing now comply with international rules, except for tax breaks from Washington State that continue to disadvantage Airbus.

Bombardier spokesman Mike Nadolski said in an e-mail that the company had expected the preliminary ITC decision given “the very low bar for Boeing in this first step of the process” and that a more detailed review would show Boeing’s claims are baseless.

The allegations opened a new front in trade tensions between the US and Canada, which have intensified since US President Donald Trump took office vowing to renegotiate the North American Free Trade Agreement (NAFTA).

The US earlier this year imposed duties on Canadian lumber, reigniting a longstanding dispute, and Trump has complained about Canadian protections for dairy farmers.

Talks to revamp NAFTA are expected to start after mid-August.

Following Friday’s ruling, Canadian Minister of Foreign Affairs Chrystia Freeland said the government would defend Bombardier’s interests, adding that a review is underway over military procurement that relates to Boeing.

Tariffs could hurt Bombardier’s efforts to win customers for its largest-ever jetliner.

The last major order for the plane — Delta Air Lines Inc’s for at least 75 jets — was in April last year.

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