UK sees Canada responsible in Bombardier-Boeing spat

Bloomberg

The UK is said to see Canada as primarily responsible for the trade dispute between Boeing Co. and Bombardier Inc. because of the level of its state aid to the aerospace company.
Publicly, the British government has said that the US imposition of punitive duties on Bombardier is disproportionate, and Prime Minister Theresa May even lobbied US President Donald Trump unsuccessfully to try to prevent it.
Privately, it believes that Canada has overstepped the mark in aid to Bombardier, according to two officials who declined to be named while talking about an ongoing dispute. Bombardier spokesman Simon Letendre declined to comment.
“We will continue to work in close collaboration with our British partners to solve this dispute,” said Adam Austen, spokesman for Foreign Affairs Minister Chrystia Freeland.
“We will continue to raise this issue with key members of
the US administration, with American elected officials, and with Boeing.”
The UK, which is seeking post-Brexit free-trade agreements with both countries, feels it’s caught in the crossfire. While British officials think Canada has brought the dispute on itself, they don’t want Boeing’s challenge to succeed and want a resolution via diplomatic means.
The face-off poses a dilemma for May on two fronts. At stake are more than 4,000 jobs at Bombardier’s plant in Belfast, where the C Series planes’ wings are made, and that strains her alliance with 10 Northern Irish lawmakers propping up her minority government.
It also strains her relationship with Trump, who didn’t come through for her on this issue. She has voiced her disappointment that the US last month slapped preliminary duties of 220 percent on Bombardier’s marquee jetliner after the Commerce Department concluded the Canadian manufacturer received unfair government subsidies.
She even went so far as to say the U.K. might not consider Boeing for future contracts, but that might turn out to be an idle threat as there are thousands of jobs also tied to the US aircraft maker. Of the 220 percent subsidies identified by the US, 200 percent was due to Canada, one of the British officials said.
Bombardier’s case rests on the fact the government of Quebec’s aid package was not a subsidy—but rather a direct investment in the C Series program. In exchange for a $1 billion cash infusion, the Canadian province received a 49.5 percent stake in the C Series.
Level Playing Field?
The US Department of Commerce’s preliminary determinations almost always rule in favor of the US complainant, according to Austen, who added that Boeing’s petition is “clearly and unfairly aimed at eliminating Bombardier’s C Series aircraft from the US market.”
Canada’s federal government also helped out Bombardier by agreeing to provide $300 million in repayable contributions for two of the company’s jet programmes—the C Series and the Global 7000 business aircraft, which is still under development. The federal funds are interest-free. Canada and the UK have pointed out that more than half of the Bombardier plane’s components are made in the US, supporting 22,000 American jobs.