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Sat, Oct 20, 2007

Canada Files Third-Party Case In WTO Subsidies Battle

Wants Bombardier Protected From Unwanted Competition

For all the bluster spewing forth from both the US and European Union regarding the ongoing subsidies battle before the World Trade Organization, a quieter entity has watched from the sidelines, waiting to see how the fight played out. Recently, however, Canada launched its own case before the WTO, in an attempt to ward off new foreign challenges to its support for Bombardier.

"At the end of the day, as in all these cases, it's all about safeguarding market share. In Canada's case, Bombardier's," Toronto trade lawyer Lawrence Herman told the Globe and Mail.

As ANN reported, the WTO is working to settle dueling lawsuits between the US and EU. Each side accuses the other of unfairly subsidizing their rival aerospace manufacturers -- Boeing and Airbus, respectively.

Earlier this month, Canada filed its own protest in the case -- a third-party submission, that the government in Ottawa hopes will head-off an attempt by the EU to expand the definition of what constitutes a "subsidy."

Canada fears a broader interpretation of the term could draw unwanted attention to its relationship with the homegrown planemaker.

"The findings of the panel... will have important consequences for the future development and production of civil aircraft," the submission read, adding Ottawa filed the protest due to "its role as one of the world's major producers of civil aircraft."

Canada is no stranger to the subsidies fight... though it hopes things will turn out better this time around.

As ANN reported, in 2002 a protracted court battle between Bombardier and Brazil's Embraer ended in a draw, more-or-less. Canada has no desire to allow Brazil any more advantages.

"If the EU were to succeed, it could open the door to renewed challenges by Brazil, seeking to protect Embraer's foreign markets against Bombardier," said Herman.

FMI: www.bombardier.com, www.embraer.com

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