On the same week that Bombardier learned it could face stiff duties for selling its C Series jet in the United States, the World Trade Organization has agreed to look into a separate complaint that the jet maker has received unfair subsidies from Canada.
The WTO on Friday said it will consider Brazil’s complaint that subsidies from Canada and the province of Quebec have allowed Bombardier to sell its C Series passenger jets at artificially low prices.
“We believe that the decision of the Commerce Department reinforces the Brazilian Government's claim in the panel opened today at the WTO,” Paulo Cesar Silva, CEO of Brazil-based jet maker Embraer, in a statement Friday supporting the WTO’s move. “… These subsidies, which have been fundamental to the development and survival of the C-Series program, are an unsustainable practice that distorts the entire global market, harming competitors at the expense of Canadian taxpayers.”
The basics of Brazil’s claims are similar to a Boeing complaint to the U.S. International Trade Commission, which prompted the Commerce Department on Tuesday to make an initial ruling that Canadian subsidies to Bombardier allow it to sell the C Series at below the cost of manufacturing. Commerce recommended imposing duties of 220 percent on each plane Bombardier sells into the U.S. A final ruling isn’t expected until early 2018.
Embraer competes against Bombardier in the sale of business and regional jets.
Some of Bombardier’s 1,600 employees in Wichita are directly involved in the C Series flight test program.