Boeing loses bid for trade relief against Bombardier

Posted January 28, 2018

But the 4-0 vote by the bipartisan trade panel rejecting Boeing's claims shows the ITC can serve as a check on controversial trade enforcement actions, especially at a time when the Trump administration has encouraged companies to file more complaints and has promised a more expansive use of trade laws to curb imports.

A surprise ruling by America's top global trade arbiter in a dispute over Bombardier jets potentially has saved thousands of jobs in Northern Ireland.

She added: "When the story is told of this dispute it will be one of how, in the absence of a genuine effort by politicians and the United Kingdom government, workers themselves had to take the fight on". President Trump pulled out of the Trans-Pacific Partnership of 12 nations and threatened to withdraw from the North American Free Trade Agreement.

The 300% duties he tentatively approved would have effectively closed the American market to the company.

The decision was a surprise to many observers who expected the commission would side with Boeing even though they believed the company sustained no harm. The tariffs will not be imposed.

Worldwide trade lawyer Lawrence Herman expects the quasi-judicial body will support the American manufacturer and that Ottawa will appeal to the World Trade Organization and through NAFTA under Chapter 19.

The independent, bipartisan trade organization voted unanimously against duties imposed by the U.S. Commerce Department in October.

"This ruling is testament to the unwavering campaign by all, It will come as a huge relief to Bombardier and the thousands of workers and their families".

Following a petition by Boeing (BOE, Chicago O'Hare), the DOC had ruled previous year that CSeries aircraft being sold to USA customers, chief among them Delta Air Lines (DL, Atlanta Hartsfield Jackson), would be liable for antidumping duty (AD) and countervailing duty (CVD) as a result of both Bombardier selling the aircraft at 79.82% less than fair value and the Canadian government subsidizing the programme at a rate of 212.39%. Airbus agreed to take over the CSeries program after the Commerce Department proposed the duties. "It also removes any concerns about potential future orders in the U.S".

The trade court said it hadn't found Boeing was materially harmed by Bombardier's trade practices. Bombardier projects passenger jets carrying 100 to 150 passengers will generate about 6,000 orders globally over the next 20 years. "It was obvious Boeing was trying to stretch the definition of injury pretty significantly".

Boeing has not yet indicated whether it will lodge an appeal against the ruling. The Canadian government has already retaliated against the aircraft maker for its petition for government protection.

IBD'S TAKE: With thousands of publicly traded companies to choose from, how can you quickly find the best stocks to buy right now? However, Delta provided no update on its delivery schedule. Boeing also alleges that Bombardier is propped up by unfair government subsidies that allow it to undercut foreign competitors.

Speaking from Montreal, where he toasted the trade verdict over champagne with Bombardier counterpart Alain Bellemare, Airbus Chief Executive Tom Enders said the unexpected decision to block US tariffs on the Canadian jet represented a victory for "sober business".

"It is also a victory for USA airlines and the US traveling public", Bombardier's statement added.

Likewise, Canadian government officials, business groups and labor leaders welcomed the unexpected verdict. "The USITC ruling means that good-paying Bombardier jobs can stay in Canada".

The U.S. ITC "saw through Boeing's games", Olivier Marcil, vice-president of external relations at Bombardier, said Friday in Montreal, adding that Boeing does not have an aircraft that competes in the same sector of the market as C Series. Airbus plans to build some of the planes at its new factory in Mobile, Ala.

Boeing says those funds allowed Bombardier to sell its new C Series airliner to Delta Air Lines at "absurdly low prices" in violation of US trade rules.

The Boeing complaint aggravated increasingly tense trade relations between the USA and Canada.

"There is no joint venture". Boeing fell less than 1 percent to $341.95.