Brazil brings WTO challenge against Canada over CSeries

Brazil has formally taken its case against government financial investment in the Bombardier CSeries to the WTO. Brazil’s foreign ministry said in a Feb. 8 statement that it has requested consultations with Canada under the WTO dispute settlement system “on subsidies granted by the Canadian government to the aircraft industry, at the federal, provincial and local levels, in particular the Bombardier CSeries program.” The Québec provincial government last year invested $1b to take a 49% stake in the CSeries program. Bombardier is based in Québec. That investment angered Brazilian aircraft manufacturer Embraer, Bombardier’s prime competitor, and the company urged the Brazilian government to challenge Canada at the WTO. Embraer CEO Paulo Cesar Silva believes the government investment played a role in Delta Air Lines choosing the CSeries over an Embraer aircraft when placing a firm order for 75 CS100s last year. Brazil’s complaint appears not to be limited to the Québec investment. Though it did not elaborate, the foreign ministry said that “in 2016 only, Bombardier received at least $2.5b in government support.” This assistance, plus potential future government aid, “deepen distortions in the aircraft sector to the detriment of Brazilian interests,” the foreign ministry said.<br/>