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UK defends Bombardier with outright rejection of Boeing case

Boeing's trade case against Bombardier over the CSeries has been categorically rejected as having no merit by the UK government, which has urged the US airframer to withdraw the complaint immediately.

But the government, while robustly defending the Bombardier operation in Belfast, is aware that it risks unbalancing its relationship with Boeing at a time when US trade links hold particular importance, given the UK's withdrawal from the European Union.

Boeing has alleged that a UK provision of £113 million in repayable launch investment, made in 2009, breached trade regulations.

UK business secretary Greg Clark told parliament during a 10 October session that the government firmly refuted the allegation. He insisted that the UK had a "very rigorous" system to scrutinise state aid and, as a result, the government was "totally confident" that its launch investment complied with all international rules.

He added that the launch aid was "consistent" with similar assistance previously provided to Boeing for programmes such as its 787.

Clark also pointed out that Boeing did not manufacture a competing aircraft in the CSeries category, and establishing any detriment to Boeing was seemingly "impossible".

"We consider this action by Boeing to be totally unjustified and unwarranted and incompatible with the conduct we would expect of a company with a long-term business relationship with the UK," he said.

UK government representatives have sought support from the European Commission, among others, in an effort to encourage the US government to put pressure on Boeing.

"Neither this government nor our counterpart in Canada will rest until this groundless action is ended," said Clark, who faced concerns from the parliamentary opposition that Bombardier's workforce could be sacrificed in order to appease the US administration and secure a post-EU transatlantic trade pact.

The Scottish National Party claimed the CSeries tariff ruling illustrated President Donald Trump was pursuing a "protectionist agenda", and accused the government of harbouring a "delusion" that the Trump administration would yield to any UK demands regarding such a trade agreement.

Clark said that Boeing had benefited from UK defence contracts, and had recently invested in a new aircraft technology plant in Sheffield, and that the government was "bitterly disappointed" by the company's actions against Bombardier.

He added that he had "very explicitly" told Boeing chief Dennis Muilenburg that jeopardising the US firm's reputation and relationship in the UK was not in Boeing's strategic interests.

Opposition Labour party member Clive Betts, representing Sheffield, said an "all-out war" with Boeing needed to be avoided and stressed that, while defending Bombardier was "crucial", nothing should be done that would compromise the possibility of further Boeing investment in Sheffield.

Clark responded by stating that, while the Boeing investment was welcome, the government needed to be "absolutely clear" that companies promoting one aspect of the UK aerospace sector must not "recklessly damage" other important parts of the sector.

Labour party member Christian Matheson compared the Boeing action to the aggressive US campaigning against the British Aerospace-Aerospatiale Concorde, and queried whether Boeing's motivation was less about a trade dispute than eliminating a potential competitor.

"It is important that it should be thrown out and the case dismissed," replied Clark. "As for the motivation for it, that is for Boeing to describe.

"It has alleged that this is unfair competition. All I would observe is that it is difficult to point to competition when the product does not compete with an existing Boeing product, so Boeing’s longer-term motivations will need to be justified to the International Trade Commission."

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