Cross-bor­der ri­vals

Aero­space com­pa­nies Bom­bardier, Boe­ing clash in trade hear­ing

Cape Breton Post - - Business - BY ALEXAN­DER PANETTA

The next po­ten­tial Canada U.S. trade dis­pute was un­fold­ing in a Wash­ing­ton court­room Thurs­day as aero­space ac­tors clashed over de­tails that could hold im­pli­ca­tions for the global trade in mid-sized air­planes.

The U.S. aero­nau­tics pow­er­house Boe­ing was at a hear­ing ar­gu­ing for du­ties on Bom­bardier air­craft, in­sist­ing its smaller Cana­dian ri­val re­ceives gov­ern­ment sub­si­dies that give it an il­licit toe­hold in the in­ter­na­tional mar­ket.

Lob­by­ists, lawyers, and aero­space ex­ec­u­tives crowded the court­room for a lit­tle bat­tle play­ing out in the broader con­text of the day’s larger trade news: the U.S. an­nounce­ment that NAFTA rene­go­ti­a­tions will start in the next 90 days.

Bom­bardier has made it clear that its true goal is to grab half the in­ter­na­tional mar­ket share for 100-to-150-seat air­craft, ac­cord­ing to Boe­ing, which ar­gues its ri­val has re­ceived an un­fair head start from Cana­dian tax­pay­ers.

Boe­ing vice-pres­i­dent Ray­mond Con­ner said the sale of cheap, sub­si­dized planes to Delta helped build mo­men­tum for Bom­bardier to en­ter a new mar­ket. If Bom­bardier reaches its stated goal, he said, it would squeeze Boe­ing from that mar­ket and cost the com­pany US$330 mil­lion a year in an­nual sales.

“To­day we are at a crit­i­cal mo­ment,” Con­ner told the seven-mem­ber U.S. In­ter­na­tional Trade Commission. “If you don’t fix it now, it will be too late to do any­thing about it later... What we want is com­pe­ti­tion that is fair...

“You guys can fix this be­fore it is too late.”

Boe­ing has pe­ti­tioned the U.S. Com­merce De­part­ment and the U.S. In­ter­na­tional Trade Commission to in­ves­ti­gate sub­si­dies of Bom­bardier’s C Se­ries air­craft. Boe­ing lawyers ar­gued Thurs­day that Bom­bardier’s own words prove it was res­cued fi­nan­cially by multi­bil­lion-dol­lar as­sis­tance from the Que­bec gov­ern­ment.

The process is sim­i­lar to the one that has led to du­ties on Cana­dian soft­wood lum­ber. These are among the loom­ing trade dis­putes with the U.S., as NAFTA talks could raise the heat on dif­fer­ences over dairy, dis­pute res­o­lu­tion, auto parts and other is­sues.

Bom­bardier rep­re­sen­ta­tives coun­tered that their planes never com­peted with Boe­ing in a sale to Delta air­lines - which the Amer­i­can ri­val de­scribes as a sem­i­nal mo­ment.

Bom­bardier lawyer Peter Licht­en­baum said the plain­tiff is a global pow­er­house that hasn’t lost any sales as a re­sult of Bom­bardier, has an en­vi­able or­der back­log and doesn’t even com­pete with Bom­bardier in the sales cam­paigns it has com­plained about.

“Boe­ing’s pe­ti­tion in this case is un­prece­dented in its over­reach,” he said. “If this is a case of David vs. Go­liath, Boe­ing has cast it­self in the wrong role.”

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