US trade body backs Canadian plane maker Bombardier against Boeing

MONTREAL/WASHINGTON: A US trade commission on Friday handed an unexpected victory to Bombardier Inc against Boeing Co, in a ruling that allows the Canadian company to sell its newest jets to US airlines without heavy duties, sending Bombardier’s shares up 15 per cent.
The US International Trade Commission’s unanimous decision is the latest twist in US-Canadian trade relations that have been complicated by disputes over tariffs on Canadian lumber and US milk and President Donald Trump’s desire to renegotiate or even abandon the North American Free Trade Agreement (Nafta).
Trump, who did not weigh in on the dispute personally, took his “America First” message to the world’s elite on Friday, telling a summit that the United States would “no longer turn a blind eye” to what he described as unfair trade practices.
The ITC commissioners voted 4-0 that Bombardier’s prices did not harm Boeing and discarded a US Commerce Department recommendation to slap a near 300 per cent duty on sales of the company’s 110-to-130-seat CSeries jets for five years. It did not give a reason immediately.
US Commerce Secretary Wilbur Ross said in a statement that the commission’s finding “shows how robust our system of checks and balances is.”
“It’s reassuring to see that facts and evidence matter,” said Chad Bown, a senior fellow at the Peterson Institute for International Economics in Washington. “This part of the trade policy process works unimpeded despite President Trump’s protectionist rhetoric.”
The decision will also help Bombardier sell the CSeries in the United States by removing “a huge amount of uncertainty,” at a time when its Brazilian rival Embraer is bringing its new E190-E2 jet to market, a source familiar with the Canadian plane and train maker’s thinking said.
The ITC had been expected to side with Chicago-based Boeing. The company alleged it was forced to discount its 737 narrow-bodies to compete with Bombardier, which it said used government subsidies to dump the CSeries during the 2016 sale of 75 jets at “absurdly low” prices to Delta Air Lines.
Bombardier called the trade case self-serving after Boeing revealed on December 21 that it was discussing a “potential combination” with Embraer. Boeing denied the trade case was motivated by those talks.
The dispute may not be over.
“This can still be appealed by Boeing,” Andrew Leslie, parliamentary secretary to Canadian Foreign Minister Chrystia Freeland, told reporters in Montreal.
Boeing said it would not consider such options before seeing the ITC’s reasoning in February.
But Boeing said it was disappointed the commission did not recognise “the harm that Boeing has suffered from the billions of dollars in illegal government subsidies that the Department of Commerce found Bombardier received and used to dump aircraft in the US small single-aisle airplane market.”
Bombardier, Delta and the US consumer advocacy group Travelers United all called the ITC decision a victory for consumers and airlines.
— Reuters