Canada blasts Boeing, warns US jobs at stake in Bombardier trade row

[OTTAWA] Canada-US trade relations took a nosedive on Wednesday after the US Commerce Department announced it would impose steep anti-dumping duties on Canadian manufacturer Bombardier's new CSeries jetliners.

The two neighbours are among the world's closest allies and trading partners, with more than half a trillion (US) dollars worth of goods exchanged annually.

So the US imposition of a 220 per cent countervailing duty on a major Canadian manufacturer, following an investigation into state subsidies sparked by a Boeing complaint, drew strong criticism.

Bombardier, unions representing Canadian aerospace workers, and both the Canadian and Quebec governments assailed the duties as "absurd," "ridiculous," "madness," and an attempt to "stifle competition."

The duties - which are expected to be applied in 2018 when Delta Airlines will receive the first of 75 CSeries jetliners it ordered - would also have a negative impact on the current renegotiation of the North American Free Trade Agreement (Nafta), they warned, and called for retaliatory measures.

"Obviously we're disappointed by the decision and I will continue to fight hard for good Canadian jobs," said Prime Minister Justin Trudeau, calling the US tariff "protectionist and warrantless."

Ottawa - along with Britain, which is seeking to safeguard 4,200 Bombardier jobs in Northern Ireland - has threatened to boycott Boeing, which is hoping to sell 18 Super Hornet fighter jets to Canada and 50 Apache helicopters to Britain.

"Canada strongly disagrees with the anti-dumping and countervailing duty investigations into imports of Canadian large civil aircraft," Canadian Foreign Minister Chrystia Freeland said overnight after the US announcement late Tuesday.

"This is clearly aimed at eliminating Bombardier's CSeries aircraft from the US market," she said.

On Wednesday, Ms Freeland said she would call US Commerce Secretary Wilbur Ross to protest the tariff, and discuss Canada's next move with her British counterpart.

Ms Freeland also warned that US parts suppliers for the CSeries aircraft, which employ 23,000 Americans, and their jobs could be at risk because of Boeing's petition.

Her comments followed a meeting with US and Mexican counterparts for a third round of contentious Nafta talks in Ottawa.

At those negotiations, Canada is facing pressure to grant the US more access to its dairy market.

Separately, Canada is fighting with Washington for access to the US market for its softwood lumber, fearing a major hit to one of its top industries if it cannot secure a deal.

'BOEING WILL REGRET THIS'

Quebec Premier Philippe Couillard called the Boeing-Bombardier row a low point in Canada-US relations.

"It's not positive," he said bluntly.

The premier said that "Boeing will regret this" and that "the American economy and American workers will suffer as a result of the ruling."

Jerry Diaz, president of Canada's largest union, Unifor, which has consulted heavily with the Trudeau administration on the NAFTA negotiations, went further in saying the gloves were off.

"If they're looking for a trade war, we ought not to continue to back down," he said. "We have to be very strong and we need to tell them, enough is enough." "Ultimately, we're going to have to retaliate."

For Bombardier, the US announcement was as a double blow, coming on the same day that news broke of a tie-up between German train-maker Siemens and France's Alstom to create a rail juggernaut that would compete with Bombardier's struggling rail division.

After years of losses, Bombardier has pegged its hopes for a turnaround on the CSeries - the first new aircraft design in the 100- to 150-seat category in more than 25 years.

It called the magnitude of the US duty "absurd and divorced from the reality about the financing of multibillion-dollar aircraft programmes."

It accused Boeing of using a "skewed process to stifle competition."

The union representing 7,000 Bombardier aerospace workers also denounced the tariff, accusing Boeing executives of "acting like bullies by manipulating American laws and taking advantage of Washington's penchant for protectionism to close the US market to the CSeries." "If for the Americans Nafta is dead, we should be told right away," it added.

The Canadian Chamber of Commerce also came to Bombardier's defence, saying the US decision "penalises Bombardier for receiving the same government support that other manufacturers across the globe get from their own governments."

AFP