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WTO appoints panel to review Bombardier subsidies

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Staff Writer | September 30, 2017
The World Trade Organization formally established a panel to review CSeries subsidies at the request of Brazil’s Embraer.
Aircraft   A dispute settlement panel
The establishment of a dispute settlement panel comes a month after consultations with Canada failed to resolve Brazil’s complaint that government subsidies for the CSeries are inconsistent with Canada’s WTO obligations.

It also comes the same week that the U.S. Department of Commerce announced a nearly 220 per cent countervailing duty against the controversial planes after Boeing Co. complained Bombardier benefited from improper government subsidies, giving it an unfair advantage when selling its CSeries jets south of the border.

“We believe that the decision of the Commerce Department reinforces the Brazilian government’s claim in the panel opened today at the WTO,” Embraer CEO Paulo Cesar Silva said in a news release.

He said the government subsidies have allowed Bombardier to sell the CSeries at artificially low prices that distort the global market and harm competitors.

None of the three WTO panel members have been appointed in what could be a lengthy review process. Boeing and Airbus have battled for 13 years over government subsidies.

Brazil’s Embraer said the WTO panel will examine more than US$3 billion in subsidies received from the governments of Canada and Quebec.

The aerospace rival has eaten away at Bombardier’s leadership in regional jets and is developing an updated offering to partially compete with the CSeries.

Bombardier said the Canadian government plans to defend the interests of Bombardier and the Canadian aerospace industry at the WTO.