Brazil drops WTO subsidies suit against Canada, calls for negotiations

Brazil has dropped a complaint with the WTO in which it alleged that Bombardier, when developing the jet now called that A220, received unfair subsidies from Canadian governments. Brazil filed the complaint in February 2017 on grounds that the subsidies – which it pegged at more than $3b – harmed Brazilian aerospace manufacturer Embraer. Embraer’s E-Jets compete with A220s. In calling off the dispute, Brazil says recent fundamental changes to the aerospace market – notably changes wrought by Airbus’s acquisition of the A220 programme – have made a desirable ruling uncertain. “Brazil remains convinced of the strength of its case. Nevertheless, it has become clear that the dispute could not effectively remedy the impacts of such large-scale subsidies on the commercial aircraft market,” Brazil’s statement says. “This market is, today, fundamentally different from when Brazil presented its panel request to the WTO.” Brazil had alleged that subsidies received by Bombardier from the Canadian federal government and government of Quebec “distorted the conditions of the competition in the commercial aircraft market and caused serious prejudice to the Brazilian producer Embraer”.<br/>