After years of back-and-forth accusations between Brazil and Canada, the Council of Ministers of Brazil’s Foreign Trade Chamber (CAMEX) has authorized the opening of a formal dispute settlement procedure against Canada at the World Trade Organization (WTO) on state subsidies granted to the aeronautical industry, specifically to Bombardier.
CAMEX is Brazil’s highest government institution with responsibilities over the country’s foreign trade policies.
Embraer said the decision was of strategic importance. CEO Paulo Cesar Silva declared that the formal dispute settlement process at the WTO was “the only means to ensure a level playing field in the market”.
The Brazilan case cites $2.5bn injected into Bombardier by the Government of Quebec in 2016 and the expectation that the Canadian Federal Government will make a significant new contribution to the company's capital “to ensure the viability of the new C Series aircraft and its placing on the market at artificially reduced prices”.
In the assessment of Brazil, the support granted by the Canadian government to Bombardier, totalling over $4bn, has affected the competitive conditions in the market in a way that is incompatible with the commitments made by Canada in the WTO.
Bombardier maintains that the investments are fully compliant with all WTO rules and regulations.