Brazil to ask for WTO panel to settle dispute over Bombardier subsidies

MONTREAL -- Brazil says it will ask the World Trade Organization to establish a dispute settlement panel after consultations with Canada failed to resolve its complaint about government subsidies to aircraft manufacturer Bombardier.

The South American country said it will ask the WTO to examine more than 20 subsidy programs granted to the Montreal-based company for the development of its CSeries aircraft.

Brazil estimates Bombardier (TSX:BBD.B) and suppliers have received more than US$3 billion in subsidies, which it claims have hurt its aviation industry led by Embraer.

"The Brazilian government hopes that the litigation will allow the rebalancing, as soon as possible, of the conditions of international competitiveness in the aeronautical sector, artificially affected by the Canadian subsidies," its foreign ministry said in a news release.

Bombardier said it is disappointed by Brazil's request, but it is ready to respond.

"We are very confident that the investments and contribution programs comply with all WTO and international trade rules," said spokesman Simon Letendre.

Brazil claimed Ottawa would not address the settlement of the dispute during talks. Hence, it will seek to have the matter discussed by the WTO dispute settlement body on Aug. 31.

Canada can object to the first request, but the panel would automatically be established a month later.

Brazil's request comes as the U.S. Department of Commerce continues to investigate Boeing's petition to impose anti-dumping and countervailing duties for alleged unfair trade.

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