OTTAWA – Brian Tobin, Minister of Industry, and Pierre Pettigrew, Minister for International Trade, announced that the Government of Canada will act to preserve Canadian jobs by matching the financing terms Brazil uses to support the sale of its Embraer aircraft.
“This is a measured and focused response to Brazil’s failure to conform to
WTO rules,” said Minister Tobin. “Canada is now acting to defend the jobs of
24,000 Canadian workers who are being put at risk while Brazil continues to
flout international rules.”
“Since 1996, Canada has gone to the WTO four times to seek rulings on the
legality of Brazil’s export assistance to Embraer, yet Brazil has continued
to ignore these rulings” said Minister Pettigrew. “By targeting Embraer
directly, we are bringing pressure to the source of our trade dispute with
Brazil.”
Bombardier is competing for a major aircraft purchase by Air Wisconsin, an
important feeder for United Airlines. The contract is for 75 regional jets,
with an option for 75 more.
On price and on quality, Bombardier says it can win this contract but it
cannot match the concessional financing provided by Brazil. In this special
case, the Government of Canada is prepared to help match Brazil’s financing
package.
Today’s action does not preclude future retaliation that the WTO has
authorized Canada to take against Brazil in the long-running dispute over
Proex.
On December 12, Canada requested and was granted authority from the WTO to
retaliate economically against Brazil. In August, the WTO had ruled that
Canada could apply up to $344 million per year in economic countermeasures
against Brazil, confirming that Proex violated WTO rules and had done
significant damage to Canada’s aircraft industry.
Canada has yet to decide on future retaliatory measures that may be taken
against Brazil. The last negotiating session between Canada and Brazil was
in late November in Brazil.
