Trudeau warns to halt Boeing F-18 deal on Bombardier row

Bloomberg

Prime Minister Justin Trudeau says Canada won’t buy Boeing Co. fighter jets while the company pursues a trade challenge against Montreal-based Bombardier Inc. over its commercial aircraft. Trudeau made his threat to halt what he called Canada’s “significant procurement” of F-18 Super Hornets alongside UK Prime Minister Theresa May. Both leaders are pressing the US firm to drop its challenge of Bombardier’s C Series programme.
“We won’t do business with a company that’s busy trying to sue us and put our aerospace workers out of business,” Trudeau said at a joint press conference in Ottawa. Trudeau’s tough talk comes after the US Defense Security Cooperation Agency’s approval last week of the potential sale of 18 Super Hornets, valued at $5.23 billion, to the Canadian government. May has raised the issue with US President Donald Trump, as Bombardier is the biggest private employer in Northern Ireland. Canada’s ambassador to Washington said last week that Boeing had walked away from negotiations with the government.
Boeing is acting in its own “narrow economic interest to harm a potential competitor,” Trudeau said, adding the challenge “is not in keeping with the kind of openness to trade that we know benefits citizens in all countries.”

Pricing and Subsidies
The Chicago-based planemaker launched its dispute against Canadian rival Bombardier earlier this year, alleging the Canadian government is
illegally subsidising Bombardier’s C Series commercial airliner program and that the planes are being sold in the US at “absurdly low” prices.
Quebec’s provincial government completed a $1 billion investment in the C Series programme last year that provided Bombardier a lifeline and paved the way for two breakthrough orders—with Air Canada and Delta Air Lines. Earlier this year, Canada’s federal government pledged $302 million in what it called “ repayable programme contributions” to a pair of Bombardier projects, including the C Series.
The US Commerce Department is investigating whether to impose countervailing duties on the Bombardier planes. A preliminary ruling is expected September 25, with a separate decision on anti-dumping duties expected October 4. Final determinations and orders would probably not be made until 2018.
May downplayed the significance of next week’s ruling. “That will just be a preliminary judgment, and it’ll be possible for us to continue to work together to try and bring around the resolution that we want,” she said. Later Monday, the British prime minister met with Bombardier Chief Executive Officer Alain Bellemare during a business roundtable.
In an e-mailed statement, Boeing said it “is not suing Canada” and the matter is a commercial dispute with the Canadian company. “Bombardier has sold airplanes in the US for millions of dollars less than it has sold them in Canada, and millions of dollars less than it costs Bombardier to build them,” according to the statement. “This is a classic case of dumping, made possible by a major injection of public funds.”
In a statement posted on its website, Bombardier urged the US government to reject Boeing’s trade claim.
“It is pure hypocrisy for Boeing to say that the C Series launch pricing is a ‘violation of global trade law’ when Boeing does the same for its new aircraft,” Bombardier said.
“Boeing’s self-serving actions threaten thousands of aerospace jobs around the world, including thousands of UK and US jobs and billions of purchases from the many UK and US suppliers who build components for the
C Series.”
The premier cited the uncertainty over Boeing’s challenge as a factor in sales of the C Series, suggesting potential buyers are holding off on purchases.