| BRASILIA/SAO PAULO
BRASILIA/SAO PAULO Feb 8 Brazil opened a formal
complaint against Canada at the World Trade Organization (WTO)
on Wednesday, accusing the country of distorting the global
aerospace industry with subsidies for planemaker Bombardier Inc
Brazil has threatened for months to open the WTO process,
arguing that support for Bombardier's new CSeries was
undercutting the market for commercial jets made by Brazilian
rival Embraer SA.
The latest support for Bombardier came on Tuesday in the
form of interest-free loans worth C$372.5 million ($283 million)
from the Canadian government. Canadian Trade Minister
Francois-Philippe Champagne said the loans complied with WTO
rules and the government would defend itself against litigation.
Brazil's Foreign Ministry cited news of additional subsidies
for Bombardier in a statement on Wednesday, criticizing "at
least $2.5 billion in government support" for the Canadian
"It is the understanding of Brazil that these Canadian
subsidies artificially affect international competitiveness,"
the Brazilian ministry said in a statement. "New support that
has been announced could further deepen the distortions in the
aeronautical sector in detriment to Brazilian interests."
The province of Quebec, where Bombardier is based, injected
$1 billion into the company's CSeries program. The province's
largest pension fund invested $1.5 billion in the company's rail
unit last year.
Embraer Chief Executive Paulo Cesar Silva said in a
statement that the ongoing subsidies "have not only been
fundamental in the development and survival of the CSeries
program, but have also allowed Bombardier to offer its aircraft
at artificially low prices."
Bombardier representatives did not immediately respond to a
request for comment.
Both countries now have up to 60 days to try to settle the
dispute before the creation of a panel of experts to help the
WTO make a ruling in the case.
The latest WTO standoff follows nearly a decade of sparring
between Brazil and Canada over state financing for Embraer and
However, the current dispute is closer in substance to the
clash between the United States and the European Union over
allegedly unfair government loans to Boeing Co and Airbus
The WTO found government loans from EU member states to
support Airbus aircraft development constituted unfair
subsidies, prompting the threat of U.S. sanctions. The case has
still not completed a lengthy WTO legal and compliance process.
($1 = C$1.3182)
(Reporting by Brad Haynes and Alonso Soto; Editing by Daniel
Flynn and Paul Simao)