UPDATE 4-Canada's Trudeau says rivals fear CSeries as Brazil mulls WTO move

Fri Jul 15, 2016 8:23pm EDT
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(Adds new Brazilian Foreign Minister's comments)

By Allison Lampert and Ana Mano

MONTREAL/SAO PAULO, July 15 (Reuters) - Canada insisted on Friday that it plays by international trade rules after Brazil warned it may challenge government funding to planemaker Bombardier Inc, a move that would revive a two-decade-old dispute between the two countries.

The Montreal-based company is locked in competition with Brazil's Embraer for narrowbody jet sales. The South American country has said that government financing gives Bombardier an unfair advantage.

Brazilian Foreign Minister Jose Serra told Reuters on Thursday it could move against Canada at the World Trade Organization (WTO) over $1 billion in funding that Bombardier received from the Canadian province of Quebec for its CSeries jet.

Canadian Prime Minister Justin Trudeau brushed off the suggestion, telling reporters "there is no country in the world that doesn't heavily subsidize its aerospace sector."

"I can understand that our competitors are rightly worried about how great the CSeries plane is," he said in Calgary.

The Brazilian minister responded in a statement on Friday evening that Trudeau's comments were revealing.

"It's telling that the Canadian Prime Minister admits the Canadian government heavily subsidizes Bombardier," Serra said.   Continued...