March 23, 2018 / 1:42 PM / in 8 months

End to Boeing trade case good news for aerospace: Bombardier

MONTREAL (Reuters) - Boeing Co’s decision to end its trade case over the sale of Bombardier CSeries jets to U.S. carriers is good news for the aerospace industry and the public, the Canadian plane and train maker said on Friday.

A man takes a picture of a Bombardier CSeries aircraft during a news conference to announce a partnership between Airbus and Bombardier on the C Series aircraft programme, in Colomiers near Toulouse, France, October 17, 2017. REUTERS/Regis Duvignau/Files

Boeing said late on Thursday it will not appeal a U.S. trade commission ruling that allows Bombardier to sell its CSeries in the United States without hefty duties. A Boeing spokesman did not give a specific reason for the company’s decision.

“Boeing’s claim was meritless and should never have been brought,” Bombardier said in a statement. “We are happy that it has come to an end.”

Boeing had argued that the CSeries benefited from unfair subsidies and was dumped below cost in the United States. The case heightened trade tensions between the planemaker, the United States and its allies Canada and the United Kingdom. The 110-130 seat jet’s wings are produced in Belfast.

U.S.-Canadian trade relations have been complicated by disputes over tariffs on Canadian lumber and U.S. milk and President Donald Trump’s desire to renegotiate the North American Free Trade Agreement (NAFTA).

Large planemakers are becoming increasingly focused on smaller jets. Airbus SE has agreed to take a majority stake in the CSeries in a deal expected to close later this year, while Boeing is in tie-up talks with Bombardier’s Brazilian rival Embraer SA.

It is not yet clear how Boeing’s decision will impact the planemaker’s relationship with the Canadian government, which is holding a competition for fighter jets worth between C$15 billion ($11.68 billion) and $C19 billion.

Ottawa says bids will be evaluated in part by whether firms have caused any past economic damage to Canada - a clear reference to the U.S. planemaker. Procurement Minister Carla Qualtrough told Reuters last month that the government had not yet “decided how far back into the past companies’ (actions) will be analyzed.”

U.S. aerospace analyst Richard Aboulafia said that the trade dispute may not lead to long-term damage, especially if Boeing starts “a new messaging campaign” with Canada and the U.K.

“I think mistakes were made,” said Aboulafia, vice president, analysis, at Teal Group. “But there aren’t a lot of alternatives. And memories aren’t that long in aerospace and politics.”

($1 = 1.2844 Canadian dollars)

Reporting By Allison Lampert; Editing by Susan Thomas

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