MercoPress. South Atlantic News Agency

WTO backing for Brazil in the aircraft manufacturing subsidies dispute with Canada

The case plays into a decades-long dispute between Bombardier and its main rival, Brazil’s Embraer SA

Brazil has secured World Trade Organization backing to press its claims against Canada in a dispute over what it says are unfair subsidies for Bombardier Inc.’s CSeries jets, a preliminary WTO ruling published this week showed.

The case plays into a decades-long dispute between Bombardier and its main rival, Brazil’s Embraer SA, which gained higher profile after European heavyweight Airbus SE agreed to take a majority stake in the Canadian plane program.

“What happened today was very important for Brazil; it was a small victory,” Celso Pereira, a Brazilian diplomat at the WTO, said. “Now the game will really begin. We’ve overcome an important barrier.”

Brazil launched the WTO dispute last year, saying the CSeries had received US$ 3 billion in federal, provincial and local subsidies.

Canada objected, saying Brazil had unfairly broadened the case by including four claims that went beyond its original complaint. Brazil said their inclusion did not change the essence of the dispute.

In their preliminary ruling on the case, the three-person WTO dispute panel threw out Canada’s argument.

“The panel agrees with Brazil that the four measures at issue fit within the scope and essence of the dispute as described by Brazil, so that the scope of the dispute is not expanded by Brazil’s panel request,” the preliminary ruling said.

Canada had also argued that Brazil had failed to identify specific payments from Canadian research and technology councils. But the panel rejected that argument too.

“We conclude that Canada’s and Quebec’s provision of funding, technology transfer, in-kind goods and services, and other support ... is identified with sufficient particularity in Brazil’s panel request and therefore falls within the panel’s terms of reference,” the panel underlined.