wnol.info July 20 2018

United States trade court rules against Boeing in Bombardier dispute

July 20 2018, 06:44 | Alonzo Simpson

The C Series plane

The C Series plane

In an unexpected and shocking outcome, the U.S. International Trade Commission voted unanimously in favor of Canadian builder Bombardier, stating that the 150-seat CS100 does not represent a threat to the sales of Boeing's 737-700.

But the ITC on Friday nullified that decision on a 4-0 vote, ruling that a US industry would not be "materially injured or threatened with material injury" by imports of the Bombardier planes.

The dispute centered around claims by rival U.S. firm Boeing that Bombardier received unfair state subsidies from the United Kingdom and Canada - allowing it to sell airliners at below cost prices in the US. Airbus plans to build some of the planes at its new factory in Mobile, Ala. It means the ITC disagrees with Boeing that the C Series benefited from massive state subsidies that allowed the airliner to be sold in the United States at less than fair value.

But the ITC found no evidence that Boeing suffered any injury as a result of Atlanta-based Delta Airlines' order of the C-Series passenger jets.

The U.S. International Trade Commission (ITC) rejected American planemaker Boeing's (NYSE:BA) request to impose heavy tariffs against Canadian rival Bombardier over claims the latter was dumping jets into the U.S. market.

In response to the ITC ruling, Boeing said that it would continue to document any harm inflicted on itself or the aerospace US supply chain by illegal subsidies.

The dispute took a twist in mid-October when Bombardier agreed to sell the C-series plane to Airbus, Boeing's European competitor. 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.

"With this matter behind us, we are moving full speed ahead with finalizing our partnership with Airbus", the statement said.

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Boeing executives said they challenged Bombardier in an effort to maintain a level playing field in the global jetliner industry, which has been beset for years by allegations of unfair government subsidies. Delta (DAL), which is the only US airline to purchase the C series, also praised the decision.

The financials group, which accounts for more than one-third of the TSX's weight, slipped 0.1 percent. Although it doesn't manufacture a similar-sized airplane, Boeing subsequently filed a complaint with the Trump Administration saying the Canadian company was selling the airplane at below unit cost.

Airbus CEO Tom Enders said in a statement - "We are happy to see that the ITC concurred with our views".

"The sophisticated process for assembly high-technology large civil aircraft, significant employment, and share of US content planned for the new U.S".

Typically, domestic industries seeking relief under these statutes (the U.S. Antidumping and Countervailing Duty laws) are successful because the evidentiary thresholds are so low. The US administration had threatened to impose duties of 292 per cent on imports of Bombardier's CSeries aircraft. "Those violations have harmed the USA aerospace industry, and we are feeling the effects of those unfair business practices in the market every day", Boeing added.

A Bombardier C Series jet in Delta livery.

Delta Air Lines Inc. said it looks forward to introducing the CS100 to its fleet.

"Boeing's petition in this case is unprecedented in its overreach", Lichtenbaum told the commission.

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