Canada first: USA trade panel unexpectedly rejects Boeing trade complaint

Posted January 28, 2018

"It also removes any concerns about potential future orders in the U.S".

The ruling also opens the door for Montreal-based Bombardier to woo new American customers while potentially easing US trade tensions with Canada and the United Kingdom, where the company builds wings for the aircraft.

British Prime Minister Theresa May on Friday welcomed Bombardier's BBBd.TO unexpected trade victory against US planemaker Boeing Co (BA.N) as good news for British industry.

The U.S. International Trade Commission (ITC), a quasi-judicial federal agency that directs action by the United States against unfair trade practices, ruled Friday that U.S. giant Boeing Co. and the wider American aerospace industry were not injured or could not be injured, by Bombardier C Series imports into the United States.

The unanimous trade ruling, coupled with the Alabama plan, puts the CSeries "on the right path to re-enter the US market", Fadi Chamoun, a BMO Capital Markets analyst, said in a note to clients.

The U.S. company has a huge backlog of orders, record profits and its shares more than doubled over the past year.

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Bombardier had argued in its final submission to the ITC that throughout the investigation, "Boeing has been forced to rely on a combination of exaggerations, shifting criteria, and pure conjectures".

The firm said it will be reviewing the the Commission's more detailed opinions in the coming days, and will continue to document any perceived harm to its business and its US supply chain from what it defines as "illegal subsidies". Boeing has denied that the trade case had been motivated by talks with Embraer. The case raised hackles in the U.K.as well, with the government anxious about the potential fallout for a Bombardier factory in Northern Ireland.

Boeing has forged close ties with President Donald Trump, who this week slapped tariffs on imported solar panels and washing machines on the grounds that they're harming USA industry.

ITC commissioners voted 4-0 Bombardier's prices were not harmful to Boeing and threw aside a recommendation by the U.S. Commerce Department to place a duty of close to 300% on sales of the 110-to-130 seat jets in its CSeries for a period of five years.

The Canadian government told the commission that it can't side with Boeing's "unprecedented" argument because there is no evidence that any C Series planes will be imported into the United States because the planes destined for US customers will be assembled in Alabama.

"There is a strong possibility that the commission will decide against Bombardier because there is a tendency in the current climate for all tribunals and agencies involved in trade to take protectionist decisions", he said in an interview.

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The case report will be made available March 2 on the ITC website.

The ITC's role is to determine whether the aircraft manufacture industry in the USA is damaged by imports that the administration believes are being sold too cheaply.

After the trade panel's ruling, the company said it would review the decision and vowed not to stand by as Bombardier's "illegal business practices" hurt US workers and companies.

Remarkably, the unanimous vote showed that despite Bombardier's reluctance to answer questions to the Department of Commerce, Boeing was unable to provide evidence that the CS100 was, in fact, damaging the weak sales of the Boeing 737-700.

"Delta is satisfied by the ITC's decision dismissing Boeing's anticompetitive endeavor to deny US aircrafts and the USA flying out community to the best in class 110-situate CS100 air ship when Boeing offers no practical option", Delta said. "This decision will support well-paying middle-class jobs on both sides of the border", she said.

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