A World Trade Organisation panel will look into Brazil's complaints that Bombardier has received more than $3 billion in subsidies, says Bombardier's rival Embraer.
The move comes after a formal request from Brazil for a panel to be established at the WTO, whose dispute settlement body met in Geneva to consider the request among others earlier today, according to WTO documents.
"With today’s approval of the request made by the Brazilian government, a WTO panel will investigate more than 25 programmes that benefited the company," says Embraer.
A Bombardier spokesperson says: "We are confident that the investments and contribution programs mentioned in Brazil’s petition are in full compliance with all WTO and international trade rules. We understand the Government of Canada intends to defend the interests of Bombardier and the Canadian aerospace industry at the WTO."
The development at the WTO is the second major blow this week for the Canadian airframer, which was hit on 26 September by a US Department of Commerce preliminary decision recommending an almost 220% tariff on its CSeries aircraft.
Embraer has long lobbied Brazil's government to take action at the WTO level, as it protested billions of dollars in investments in the CSeries programme contributed by the Quebec government and to a lesser extent, the federal government.
Embraer chief executive Paulo Cesar Silva welcomed the US government's preliminary decision on the CSeries tariffs. "We believe that the decision of the Commerce Department reinforces the Brazilian government's claim in the panel opened today at the WTO," he says.
"In order to ensure that competition in the commercial aviation market continues to be between companies, and not governments, it is essential to restore a level playing field, respecting fair trade conditions."
It is not immediately clear how long the WTO panel will take to resolve the complaint. However, Silva himself has acknowledged previously that taking action through the WTO is "not efficient. "It's going to take six to eight years... Hopefully there will be no need for that," he told analysts on an earnings call in October 2016.
Story updated with Bombardier response
Source: Cirium Dashboard
