Montreal business community hails trade decision favouring Bombardier

by Frankie Norman January 28, 2018, 0:08
Montreal business community hails trade decision favouring Bombardier

The aviation giant also plans to open an assembly line in Alabama to build C Series planes for the USA market.

Delta Air Lines also came out with a statement saying, "Delta is pleased by the U.S. International Trade Commission's ruling rejecting Boeing's anti-competitive attempt to deny U.S. airlines and the U.S. traveling public access to the state-of-the-art 110-seat CS100 aircraft when Boeing offers no viable alternative".

The independent, bipartisan trade organization voted unanimously against duties imposed by the U.S. Commerce Department in October.

The agency made its decision a day after the Montreal-based company argued that a published report of the plane's range being 2,900 nautical miles (5,370 kilometres) qualifies it to be considered as a competitor in the 100- to 150-seat segment of the market.

The dispute centered around claims by rival U.S. firm Boeing that Bombardier received unfair state subsidies from the United Kingdom and Canada - allowing it to sell airliners at below cost prices in the US.

While an agreement between Bombardier and Airbus to build C Series aircraft in Mobile was not affected by the decision, Bombardier reaffirmed its interest in the partnership.

Chicago-based Boeing first brought the case to the Commerce Department a year ago, arguing Canadian and British governments were illegally subsidizing the C-Series's costs. However, Delta provided no update on its delivery schedule. "The only way to counter the risk created by Boeing's petition is through a new USA full assembly line".

Boeing officials have said they tried to resolve their concerns diplomatically before Trump took office, to little success.

"The fact is that when you produce an aircraft in the USA, it's not subject to any US import tariff rules", Bombardier President Alain Bellemare said in an October news conference.

The bitter trade dispute between the two aircraft manufacturers escalated.

Immediately following the ruling Airbus tweeted: "We are happy to see that the ITC concurred with our views".

By voting in Bombardier's favor, the commission has certified that it does not believe Boeing's business has been materially harmed by Bombardier's trade practices, a key qualifier for imposing tariffs.

The decision Friday is a significant blow to Chicago-based Boeing and gives an unexpected boost to Airbus, Boeing's rival in the commercial airline market.

For Bombardier, and Airbus, Moore said he thinks this means they'll sell a lot of C Series planes in the U.S. "It in no way should be interpreted as a broad-scale limitation on the Trump administration's trade enforcement authority".

Boeing had complained of an unleveled playing field since Bombardier is subsidized by the Canadian government.

With Airbus set to close its deal for the CSeries, Boeing is now negotiating a possible agreement to acquire all or part of Bombardier's rival, Embraer of Brazil.

The U.S. aerospace giant launched its challenge previous year and was expected by some trade lawyers to prevail despite sharp criticism from overseas lawmakers and analysts of its pursuit of a case that drove Montreal-based Bombardier, a smaller, weaker competitor, into a deal with Airbus SE.

Boeing said it disagreed with Friday's trade ruling and would review it when further details became available. Delta shares pushed up under 1 percent. "We expect that with the building of a USA assembly plant, the whole trade dispute will be irrelevant".

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