Canada is hopeful of settling its long-running dispute with Brazil over regional-jet subsidies despite the World Trade Organisation's (WTO's) decision to examine Brazil's request for retaliatory sanctions. A further meeting next month in Ottawa will "look at technical aspects of financing", says the Canadian Department of Foreign Affairs and International Trade.

The WTO set up an arbitration panel after Canada protested at Brazil's request for $3.36 billion in trade sanctions following the WTO's ruling earlier this year that low-interest government loans backing Bombardier's sale of CRJs to Air Wisconsin constituted illegal export subsidies. Canada argues sanctions sought are "inflated".

Canada says sanctions, if approved, should only cover 75 aircraft on firm order for Air Wisconsin and not the 75 on option, pointing out it has received WTO approval for $1.4 billion in sanctions against Brazil for illegal Proex subsidies on the sale of 1,100 Embraer regional jets. The loan to Air Wisconsin is reportedly worth $1.1 billion.

Canada hopes Brazil, encouraged by the latest WTO action, will come to a settlement removing "government intervention" from regional aircraft sales.

Source: Flight International