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Boeing rejects Ottawa’s call to drop Bombardier trade complaint

Boeing Co. is refusing to back down from its trade complaint against Bombardier Inc., warning the federal government that Canada’s aerospace industry will be one of the main victims if the U.S.-based giant is frozen out of future military contracts.

JASON REDMOND/AFP/Getty Images

Boeing Co. is refusing to back down from its trade complaint against Bombardier Inc., warning the federal government that Canada's aerospace industry will be one of the main victims if the U.S.-based giant is frozen out of future military contracts.

In an interview from his company's offices in Ottawa, Boeing International president Marc Allen said the priority is fighting back against illegal subsidies and ensuring the global aerospace industry operates by a clear and common set of rules.

"We recognize the Canadian government might be upset with us. We don't intend to upset anybody, but we plainly have to do what we believe is right," Mr. Allen said. "If we don't have a [level playing field], we all lose."

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He added the company is willing to live with the consequences of its trade complaint, including any impact on Canada's planned purchase of 18 Super Hornet fighter jets manufactured by the U.S.-based manufacturer.

Federal officials refused to comment on the dispute with Boeing last week. Bombardier has publicly rejected allegations of dumping or illegal subsidies and is fighting the matter in front of the ITC.

In mid-May, Foreign Affairs Minister Chrystia Freeland responded to the trade complaint by announcing a review of all military procurements related to Boeing.

"Our government will defend the interests of Bombardier, the Canadian aerospace industry and our aerospace workers," she said.

However, Mr. Allen said the federal government should not forget that Boeing does $4-billion a year of business in Canada, raising the stakes in the public battle.

"If Canada kicks Boeing out, I think that will be deeply unfortunate for us both. It would be a deeply unfortunate outcome," he said.

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Mr. Allen went on to urge the government to stop making a link between the Super Hornet purchase and Boeing's case against Bombardier at the United States International Trade Commission.

"We are not here to tell the sovereign state what to do, that's not our role and we would never pretend to that. Do we think the two should be tied together? No, we don't think they should be," Mr. Allen said. "If you ask me my opinion, I wouldn't want the U.S. government trading national security for trade."

The U.S. Department of Commerce announced in May that it would investigate accusations that sales of Bombardier's new jetliner constitute dumping into the U.S. market. The investigation could lead to punitive U.S. duties being slapped on sales of the jet. A first decision on the matter is expected in late September.

The federal government responded to the Boeing trade complaint by ending all communication with the firm. Defence Minister Harjit Sajjan said Boeing was not behaving as a "trusted partner," while Ms. Freeland said U.S. duties slapped on Bombardier would end up hurting the firm's Americans suppliers.

However, the president of Boeing International said his company's economic footprint in Canada, with 560 suppliers and 17,000 jobs, also needs to be taken into consideration.

"It has to be a two-way street, there has to be this mutually beneficial relationship for it to be one that grows, one that both sides are happy and excited about," Mr. Allen said.

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He said Boeing offers well-paying, high-tech jobs, as well as future opportunities in areas such as biofuels, ballistic missile defence and aerial tankers.

"It's much broader than just fighters. The real question is: What's the partnership going to look like? Is Canada going to kick Boeing out or will there be a real partnership that grows and continues to be bigger and more exciting as we go? Plainly we think it's a win-win, it's mutually beneficial for us to develop forward on that relation," he said.

He added Boeing is ready to resume its dialogue with the federal government.

"When the government calls on us to act as a trusted partner, we take that very seriously, very, very seriously. Of course, that would require all sides to the challenge, to find ways that address all of the different interests in play," he said.

Still, Mr. Allen continued to argue that Bombardier, which has received more than $2-billion in government subsidies, acted in a "predatory" fashion when it sold 75 CS100 planes to Delta Air Lines Inc. at a cut-rate price last year. He said Boeing will push through with its case in the same way it has been fighting against European-based Airbus in front of the World Trade Organization for more than a decade.

The federal government started negotiations earlier this year to buy Super Hornet fighter planes to bolster the capacity of the Royal Canadian Air Force as it seeks a longer-term solution to replace its fleet of aging CF-18 warplanes. The purchase is being handled as a foreign-military sale in the United States, which means the American government is acting as an intermediary between Canada and Boeing.

"The U.S. has continued to follow the process to this point," Mr. Allen said, adding he cannot predict what will happen in the future.

Video: Boeing trade dispute with Bombardier ‘unfounded’: Sajjan (The Canadian Press)
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About the Author
Parliamentary reporter

Daniel Leblanc studied political science at the University of Ottawa and journalism at Carleton University. He became a full-time reporter in 1998, first at the Ottawa Citizen and then in the Ottawa bureau of The Globe and Mail. More

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