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U.K. joins Canada to tackle Bombardier-Boeing spat

Bombardier's CS300 Aircraft sits in the hangar prior to its test flight in Mirabel Feb. 27, 2015. U.K. Prime Minister Theresa May asked U.S. President Donald Trump to intervene in a court dispute between Boeing and Bombardier on Sept. 5, as her government seeks to protect jobs at a Bombardier plant in Belfast, Northern Ireland.

CHRISTINNE MUSCHI/REUTERS

Canada and Britain have joined forces in their efforts to get Boeing Co. to drop its trade complaint against Bombardier Inc., with British Prime Minister Theresa May taking her concerns over the case to U.S. President Donald Trump.

The Canadian government has threatened not to go through with a $6.4-billion contract to buy 18 Boeing-built Super Hornet fighter jets in an attempt to force Boeing to back off, and applauded the involvement of the British government, which is worried about the future of Bombardier's facility in Northern Ireland.

"You have to try everything," Foreign Affairs Minister Chrystia Freeland told reporters on Tuesday during a break at a cabinet meeting in St. John's. "I really believe, our government really believes [it should] leave no stone unturned, no avenue unpursued."

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Boeing has rejected attempts to link the Super Hornet contract and the Bombardier dispute. The U.S. government put a price tag of $6.4-billion on the sale on Tuesday, the first estimate of the potential cost. The acquisition process is under way, but Ottawa can still back out.

For subscribers: Boeing's complaint against Bombardier an 'assault' on Quebec's economy, minister says

Video: Bombardier denies breaking trade rules as Boeing dispute rages (The Canadian Press)

Boeing complained in April to the U.S. Department of Commerce that Bombardier's C Series planes were unfairly subsidized by the Canadian and Quebec governments. Last year, Bombardier sold 75 109-seat CS100 planes to Delta Air Lines at a cut-rate cost, after which Boeing made a complaint of predatory pricing and product dumping.

Ms. May will visit with Prime Minister Justin Trudeau in Canada next week to discuss Boeing's complaint. The bilateral meeting is expected to take place on Sept. 18, a source said.

Although the countries have several common interests, the dispute between Boeing and Bombardier is certain to be a priority, the source said.

Canada has already been working closely with Britain on this issue, Ms. Freeland said. "I think it absolutely makes sense to join forces," she said, adding that she spoke on Monday to British Foreign Secretary Boris Johnson. "We are making our case, in very strong partnership and synchronicity, with our American partners, and I think that helps."

Ms. May's office told The Globe and Mail the Prime Minister raised her concern for the Canadian plane manufacturer with U.S. President Donald Trump in a phone call last week.

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Already this month, Britain's Secretary of Business, Greg Clark, discussed the matter with three Boeing executives, U.S. Commerce Secretary Wilbur Ross, Ms. Freeland and Bombardier chair Pierre Beaudoin, his department said.

"This is a commercial matter, but the U.K. government is working tirelessly to safeguard Bombardier's operations and its highly skilled workers in Belfast," a British government spokesperson said by e-mail. "… Our priority is to encourage Boeing to drop its case and seek a negotiated settlement with Bombardier."

Bombardier manufactures wings for the C Series passenger jet in Belfast, and employs 4,500 people there. The British government has pressed Boeing to drop or settle the complaint, and has had dozens of meetings and phone calls with both plane manufacturers and the U.S. and Canadian governments.

David MacNaughton, Canada's Ambassador to the United States, said the British decided to take a stand without urging from Canada.

"They obviously had a concern because of the factory in Belfast," he said.

The British involvement will help Boeing to realize that being arbitrary and unreasonable is not in its best interests, the ambassador said.

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"The U.K. is a big buyer of Boeing aircraft," he said, "and I am not presuming to suggest what the government of the U.K. may or may not do, but obviously they take this seriously."

Fred Cromer, president of Bombardier's commercial aircraft business, called the British government's involvement positive.

"Having that kind of support is important because it speaks to sort of the heart of the issue, which is jobs, innovation and the international supply chain" of the C Series airliner, he told reporters in Mirabel, Que., on Tuesday in an update on Bombardier's commercial aircraft programs. He noted that the United States will enjoy $30-billion (U.S.) of investment and 20,000 jobs linked to C Series development and production.

When asked whether Bombardier would support a negotiated settlement with Boeing, Mr. Cromer declined to comment. He said the Canadian plane maker is looking beyond preliminary decisions to final rulings expected next year, striking a confident tone.

"I believe over the course of this that we will come out on top," Mr. Cromer said. "As far as contingency plans, we're going to continue to pursue what's right for this airplane. And we believe that we will have access to the U.S. market."

Boeing reiterated on Tuesday that it believes Bombardier sells its products in the United States at below cost.

"We believe that global trade only works if everyone plays by the same rules of the road, and that's a principle that ultimately creates the greatest value for Canada, the United Kingdom, the United States and our aerospace industry," a spokesperson said.

Supporters for the Canadian plane maker have lined up in the aerospace industry as the U.S. Commerce Department prepares a decision on its investigation into the anti-dumping complaint, expected for Sept. 25.

Major U.S. carrier Delta Air Lines Inc. defended Bombardier earlier this year, arguing that Boeing's complaint was for too broad a range of aircraft sizes. Last year, Delta ordered 75 109-seat CS100 planes from Bombardier. U.S. filings show the airline wants the anti-dumping investigation narrowed to the 125- to 150-seat range, which would include Boeing's 737 MAX planes and Bombardier's CS300 aircraft.

Two other U.S. carriers, Spirit Airlines Inc. and Sun Country Airlines, have supported Bombardier's right to sell aircraft in the country.

The manufacturer remains confident in the contested range of plane sizes. In its latest market forecast released on Tuesday morning, Bombardier said 60- to 150-seat aircraft will be "a catalyst to further growth, market penetration and airline profitability."

The International Association of Machinists is planning to protest against Boeing's trade complaints in Montreal on Wednesday with a march to the city's U.S. consulate. "Our members will be out there to protect their jobs and defend the aerospace industry in Canada," the association's Quebec co-ordinator, Dave Chartrand, said in a statement.

Jerry Dias, president of Unifor, the Canadian union that represents workers at Bombardier's Toronto plant, met with Boeing officials in Washington on Tuesday.

He said they told him they are prepared to meet with Bombardier executives and federal government officials to try to resolve the issue before Sept. 25.

With reports from Adrian Morrow, Greg Keenan and Nicolas Van Praet

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About the Authors
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

Josh O’Kane is a reporter with The Globe and Mail's Report on Business. Since joining the paper in 2011, he has told stories from New Brunswick to Nairobi. In his spare time, he writes about music and the industry around it. More

Parliamentary reporter

Gloria Galloway has been a journalist for almost 30 years. She worked at the Windsor Star, the Hamilton Spectator, the National Post, the Canadian Press and a number of small newspapers before being hired by The Globe and Mail as deputy national editor in 2001. Gloria returned to reporting two years later and joined the Ottawa bureau in 2004. More

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