Canada hails United States decision on Bombardier case

Bloomberg

The aircraft manufacturer Bombardier has won a U.S. trade dispute, in a surprise development that is likely to help protect thousands of jobs in Northern Ireland.

The ITC on Friday voted 4-0 against Boeing's assertions that it has suffered material harm as a result of the pricing and sales practices of Bombardier's CSeries jet, which Boeing claimed the company was selling into the U.S.at unfairly low prices.

The Commerce Department had imposed a almost 300% tariff after finding in a case initiated by Boeing that Bombardier's pricing of the 100- to 150-seat jets amounted to "dumping" of goods well below cost.

"It's not meant to circumvent anything, but the fact is that when you produce an aircraft in the U.S.it's not subject to any US import tariff rules", Bombardier President Alain Bellemare said in an October news conference.

Bombardier called the ruling a "victory for innovation, competition and the rule of law".

The case came mostly in response to steep tariffs the Trump administration has levied on Canada's softwood lumber industry, which is vital to US home building. The C Series is the most innovative and efficient new aircraft in a generation.

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 shares are at their highest level in three years.

The decision today by the USITC determined that the import of the C-Series aircraft does not injure the U.S. industry so the near 300 per cent antidumping and countervailing duties recommended by the U.S. Commerce Department are unwarranted.

"Those violations have harmed the USA aerospace industry, and we are feeling the effects of those unfair business practices in the market every day", the company said.

Unlike the Commerce Department, ITC investigations determine whether USA industry is injured or threatened with harm by the imports in question. That stirred fears that more restrictive trade measures will follow.

Now, Boeing finds itself in a situation where it has alienated a key customer for its defense business in the Canadian military and irked a key commercial customer in Delta Air Lines, and it has not succeeded in limiting its foreign competitors' USA expansion.

"There's absolutely no reason now for the C Series to be built in Mobile, Alabama", he argued, adding that half the C Series-related jobs are already in the U.S.

Chicago-based Boeing said cancellation of the anti-dumping duty was disappointing and that it would review the ruling when its full details are released. The European plane maker agreed to take control of the C Series program as part of a deal that is expected to close later this year.

But others, like Bloomberg News, speculate that if Bombardier is not facing stiff duties to sell its Canadian-made planes in the United States, then it has less of a reason to partner with Airbus to make the jets in Mobile.

Former ITC chairman Dan Pearson praised the decision. Chief Executive Officer Alain Bellemare thrilled investors in October by forging a C Series partnership with Airbus SE. "It is also a victory for United States airlines and the U.S. traveling public", Bombardier said in a statement shortly after the vote.

"Other airlines in the US are probably going to take a closer look", said Dan Fong, an analyst at Veritas Investment Research Corp.in Toronto.

The Prime Minister said: "I welcome this decision, which is good news for British industry".

Boeing argues its business was hurt because Bombardier received illegal government subsidies and dumped the CSeries through the 2016 sale of 75 jets to Delta Air Lines.

Aerospace experts were surprised by the size of the tariff, which effectively quadrupled the price that airlines such as Delta would have to pay when they acquire new CS100 model planes.

Unifor leader Jerry Dias hailed the ruling on behalf of Canadian workers, but said it "leaves a lot of unanswered questions, because of course Bombardier turned over the C series to Airbus to a large extent".

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