Photographer: Christinne Muschi/Bloomberg

Canada, U.K. Renew Demands on Boeing to Drop Bombardier Dispute

  • Any solution means a removal of tariffs, minister says
  • Final determination expected this month from U.S. trade body

Canada and the U.K. are continuing to press Boeing Co. to drop its trade challenge of Bombardier Inc., with one Canadian minister saying any resolution must also include the cancellation of U.S. punitive tariffs.

Canadian Foreign Affairs Minister Chrystia Freeland and U.K. Business Secretary Greg Clark wrote to Boeing Chief Executive Officer Dennis Muilenburg last month to urge a resolution to the dispute “without the need for further legal proceedings.’’ Boeing responded with a letter of its own from Bertrand-Marc Allen, president of the company’s international arm, expressing confidence that the parties would find a way to “mend” their relationship -- though without saying how. Bloomberg obtained copies of both letters.

Bombardier is facing the prospect of import duties of almost 300 percent on the C Series, its most advanced commercial jetliner, if the U.S. International Trade Commission confirms a preliminary Department of Commerce ruling later this month. The trade case, initiated by Chicago-based Boeing, has soured diplomatic relations between the U.S. and Canada -- while also angering the U.K., where Bombardier operates a plant that builds wings for the C Series.

“We’re willing to engage, we’re willing to set up a table, we want solutions. That solution means that there should be no tariffs,’’ Canadian Innovation Minister Navdeep Bains said Monday in a telephone interview when asked about the standoff with Boeing. “We’re going to be very clear that we’re going to defend the aerospace sector.’’

Bains declined to say whether discussions between Boeing, Canada and the U.K. are ongoing.

Read more: Boeing says Bombardier dumping puts smallest new 737 at risk

Last month, Canada’s federal government escalated the trade fight by scrapping plans to buy 18 Boeing Super Hornet fighter jets while launching a search for new military aircraft under parameters that could hamper future bids from the U.S. planemaker. British Prime Minister Theresa May, Defence Secretary Michael Fallon and Clark have all said the case puts at risk Boeing’s chances of winning future contracts from Britain.

“We hope you will agree that it is in our collective interests for this issue to be resolved as soon as possible and would welcome an opportunity to see how we could settle this case in a reasonable way for all concerned,’’ Freeland and Clark told Muilenburg in their joint letter, dated Dec. 18.

The U.K. “is now likely to explore a wider range of procurement alternatives in the future than would have otherwise been the case, in line with requirements on all U.K. procurers to consider social economic objectives,’’ the ministers added.

Read more: Trudeau plans to buy used Australian jets amid Boeing spat

Dan Curran, a Boeing spokesman, confirmed Friday that Boeing received the letter from Freeland and Clark.

“Suggesting retribution against Boeing for calling out Bombardier’s illegal trade practices is regrettable,” Curran said in an emailed message. “The case is between two companies and concerns fairness in the aerospace market. This letter overlooks our long relationships with Canada and the U.K., and the sustained and significant economic investments we have made in each country.”

Writing on behalf of Muilenburg and Boeing’s executive council, Allen said in a letter dated Jan. 5 that the company “very much’’ regrets the impact the dispute with Bombardier had “on our longstanding relationship last year.’’

Allen went on to list the economic benefits of Boeing’s presence in both countries in terms of employment and purchasing commitments, adding: “We value and treasure the relationships that we have had and continue to have with you. And we always will. I have every confidence that, in the year ahead, we will find a way to mend our enduring relationship, to the benefit of each of us.”

— With assistance by Alex Morales

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