OECD agrees to take up 'Country Home Rule' dispute

This story is sourced from Pro
See more Pro news »

The Organisation for Economic Cooperation and Development (OECD) has agreed to address Airbus and Boeing's interest in seeing Bombardier adhere to their 'Country Home Rule' financing pact, in parallel with the organisation's current work on creating a new aircraft sector understating (ASU) agreement, Bombardier reveals.

Airbus and Boeing have been pressing Bombardier to adhere to the 'Country Home Rule' for its 110/130-seat CSeries. The rule prohibits the two major airframers from using their home market export credit agencies to guarantee financing of aircraft orders for customers in each other's home markets.

"It's an unwritten agreement between Boeing and Airbus that's not based on any international law or sanctioned by any organization," says Bombardier Commercial Aircraft president Gary Scott. "We have said that this is an unfair agreement, sort of an exclusive club and doesn't maintain a level playing field for the rest of us."

The OECD will take up the issue, as it also works to establish a new ASU to address a separate concern from Airbus and Boeing involving the classification of the CSeries as a Category 2 regional jet, says Scott.

A Category 2 distinction would permit the Canadian government to take advantage of more beneficial export credit financing than can be obtained for larger Category 1 jets.

The OECD "expects to have resolution on the financing side by the end of the year", says Scott, "but they have not said when they'll have resolution on the home market rule. This cannot be an agreement [simply] between Boeing and Airbus. If there is such an agreement, it has to be based on international law."