Brazil, home to the world’s third-largest commercial plane manufacturer, has decided not to pursue its complaint against Canada over what it saw as unfair subsidies paid to rival manufacturer Bombardier. At the time of the initial complaint, Bombardier was producing the CSeries of jets, a direct competitor for Embraer’s own ERJ series. That situation changed when the CSeries was sold to Airbus, which has renamed it the A220.
In a recent announcement concerning the case against Canada and Bombardier, Brazil’s foreign ministry said: “Brazil remains convinced of the strength of its case. Nevertheless, it has become clear that the dispute could not effectively remedy the impacts of such large-scale subsidies on the commercial aircraft market.”
This news was welcomed by Embraer, with its Chief Executive, Arjan Maijer, telling Reuters news agency that: “We believe we should look for something similar on the funding of development and production of commercial aircraft to create a level playing field,” and adding: “We are going to see funding come to the market due to COVID-19 and we see environmental challenges ahead of us as an industry, with funding flowing for that as well.”
William Reinsch, a former U.S. Commerce official and expert at the Center for Strategic and International Studies, said Brazil’s move was: “a recognition of reality” as the WTO dispute settlement system was not functioning smoothly. “Even if it pursued the case and won, the remedy is not likely to be helpful to Brazil’s aircraft industry.”
Airbus has reiterated calls for a negotiated settlement to draw to a close its long-running feud with Boeing. Chief Executive Guillaume Faury referred to the situation of U.S. and European tariffs as a “lose-lose”, saying the time had come to negotiate
