BRASILIA (Reuters) - Brazil will ask the World Trade Organization on Friday to set up a dispute settlement panel to rule on its complaint that Canada has hurt Brazil’s commercial jet industry by subsidizing CSeries planes made by Bombardier Inc (BBDb.TO), the foreign ministry said.
Brazil estimates the CSeries aircraft has received an estimated $3 billion in federal, provincial and local subsidies, the ministry said in a statement on Thursday.
The Bombardier jets compete with the E195 aircraft made by Brazil’s Embraer SA (EMBR3.SA).
“In the Brazilian government’s opinion, the high subsidies granted by Canada to Bombardier resulted in serious damage to Brazil’s airplane industry and several of the programs involve subsidies banned by WTO rules,” the statement said.
Brazil said consultations with Canada had not led to a solution to the dispute, and it expects its request for a WTO panel to be taken up at a meeting of the organization’s dispute settlement body on Sept. 29.
Brazil accused Canada of distorting the global aerospace industry with subsidies for Bombardier when it opened the complaint in February.
The case builds on decades of antagonism between the two regional jet makers. It also echoes arguments in one of the world’s largest trade disputes, the transatlantic spat over government support for Boeing Co (BA.N) and Airbus Group SE (AIR.PA).
The province of Quebec, where Bombardier is based, injected $1 billion into the company’s CSeries program last year. The province’s largest pension fund also invested $1.5 billion in the company’s rail unit.
In 2016, Bombardier landed an order from Delta Air Lines Inc (DAL.N) for 75 CSeries jets, worth some $5.6 billion at list prices, beating out Embraer’s competing E-Jets with below break-even prices, according to the Brazilian government.
Boeing has lodged unfair trade claims against Bombardier, which could lead to U.S. duties on Bombardier’s new jetliner. The U.S. government is investigating whether to proceed with the antidumping and antisubsidy claims.
Reporting by Anthony Boadle; Editing by Sandra Maler and Tom Brown