EU backs Bombardier in trade spat with Boeing

Commission flags major ‘ shortcomings’ in U. S. probe into CSeries program

The European Union has thrown its support behind Bombardier Inc. and the United Kingdom in the ongoing trade spat with the Boeing Company, arguing that the U. S. investigation into the CSeries program “shows significant shortcomings” in both its findings and methodology.

The EU’s European Commission submitted a case brief addressed to U. S. Secretary of Commerce Wilbur Ross on Tuesday in defence of the United Kingdom, which has been accused of providing Bombardier with illegal subsidies, and Northern Ireland, home to Bombardier’s Belfast facility, which employs 4,200 and manufactures the wings for the CSeries aircraft at the heart of the trade dispute.

“This investigation shows significant shortcomings, both regarding the findings as well as concerning the methodologies applied,” the Commission said in its submission. “The Commission also has strong doubts that the methodology applied for the establishment of the duty level ( adverse facts) is compatible with World Trade Organization rules.”

The U. S. Department of Commerce slapped Bombardier with a preliminary 300- per- cent duty on all U. S.- bound imports of the CSeries aircraft as part of a trade investigation that was prompted by Boeing. Boeing has accused Bombardier of embarking on “an aggressive campaign to dump its CSeries aircraft in the United States” and offering the new aircraft to Delta Air Lines Inc. at an “absurdly low” price.

The trade rift has become a significant issue for U. K. Prime Minister Theresa May, whose government depends on the support on Northern Ireland’s Democratic Unionist Party. May had previously urged Boeing to drop its trade complaint, and also raised the issue on a call with U. S. President Donald Trump.

In its seven- page submission, the Commission “strongly contests” the Department of Commerce conclusion that the CSeries jet was dumped into the U. S. market.

“In order to establish dumping, there have to be imports,” the Commission wrote. Because none of the 75 CSeries jets ordered by Delta Air Lines have been delivered, the EU says the anti- dumping duty “does not — and simply cannot — apply.”

In its preliminary dumping decision, the Commerce Department said it based the tariff margin on “adverse facts available because Bombardier failed to provide information requested.” However, the EU called the decision “a Kafkaesque situation.”

“It is a flagrant violation of the basic rules of due process if an administration requires a party to submit data on something that does not exist and that, as a consequence, is unable to provide,” the Commission said.

The Commission’s defence of the U. K. comes as May tries to negotiate Britain’s exit from the European Union. The EU has balked at discussing trade with the U. K. until several issues are resolved, including financial obligations.

Bombardier’s ties to Europe have strengthened in the last month since the company announced French aerospace giant Airbus SE will acquire a majority stake in the CSeries program. Part of the deal involves shifting production of U. S.bound CSeries jets to a facility in Alabama, a move that could potentially allow Bombardier to avoid the crippling tariffs imposed by the U. S.

However, in a brief submitted to the Department of Commerce on Monday, Boeing argued that the partnership between Bombardier and Airbus “has no bearing whatsoever on the Department’s current investigations.

“The proposed joint venture and any theoretical plans for Alabama are simply irrelevant to these investigations,” Boeing said in its submission. “Bombardier and Airbus are extremely unlikely ever to actually establish a CSeries assembly line in Alabama … The only reason to conduct any CSeries assembly activities in the United States would be to attempt to circumvent the anti- dumping and countervailing duties that result from these investigations.”

The Department of Commerce is expected to issue a final determination in December.