Trudeau and May Join Forces Against Boeing in its Dispute With Bombardier

By Paul Vieira Features Dow Jones Newswires

The prime ministers of the U.K. and Canada vowed Monday to join forces and press Boeing Co. and the Trump administration to bring an end to the aerospace company's pursuit of a trade complaint against Montreal's Bombardier Inc.

Continue Reading Below

The dispute between the North American aircraft makers, over allegations that Bombardier unfairly benefits from Canadian government support, prompted Canadian Prime Minister Justin Trudeau to issue his most direct threat regarding Boeing's behavior at a joint press conference involving the two Group of Seven leaders.

Mr. Trudeau said a failure to resolve the matter could prompt Canada to scrap previously announced plans to buy roughly $5 billion in Boeing jet fighters, as he said he has no intention to do business "with a company that's trying to sue us."

U.K. Prime Minister Theresa May has been drawn into the dispute because it could affect a factory in Northern Ireland that makes parts for Bombardier's 100-plus-seat C Series aircraft. That carries political implications for Mrs. May's minority Conservative government, which depends on support from 10 lawmakers belonging to Northern Ireland's Democratic Unionist Party to pass critical legislation, including on Britain's exit from the European Union.

"We have discussed how we can work together to see a resolution to this issue, which from my point of view, I want to see a resolution which protects those jobs in Northern Ireland," Mrs. May told reporters. She added she would raise the Bombardier dispute with President Donald Trump when she meets with him later this week at the United Nations General Assembly.

"I will be impressing on him the significance of Bombardier to the United Kingdom, and obviously to jobs in Northern Ireland," she said.

Continue Reading Below

The rhetoric and vow from London and Ottawa to fight together emerges before the International Trade Commission is scheduled to issue next week a preliminary ruling on Boeing's complaint.

Boeing alleges Canadian state subsidies have allowed Bombardier to sell its C Series in the U.S. at below cost, and this poses an unfair competitive threat to Boeing's own 737 passenger jets. Boeing wants U.S. authorities to impose tariffs on C Series imports to the U.S.

"In need of a big name sale in the United States, Bombardier offered planes at absurdly low prices, millions lower than in its home market. This is a classic case of dumping," Boeing said in a recent statement.

The Canadian government and Bombardier deny Boeing's allegations.

Aerospace analysts say plane makers including Boeing routinely sell new plane models below what they cost to make to win market traction, analysts say. Bombardier's C Series is smaller than any Boeing jet, and the U.S. company didn't make an offer last year on the contract that Bombardier secured from Delta Air Lines Inc.

Mr. Trudeau said Boeing is pursuing this complaint due "to their narrow economic interest to harm a potential competitor, and is not in keeping with the kind of openness in trade that benefits citizens all around the world."

This escalated rhetoric also comes as the U.S., Canada and Mexico are set to meet for the next round of trilateral talks aimed at revamping North American Free Trade Agreement, known as Nafta. Those talks are unfolding while Mr. Trump continues to threatened to withdraw from the pact unless the U.S. gets better terms.

Jenny Gross in London contributed to this article.

Write to Paul Vieira at paul.vieira@wsj.com

(END) Dow Jones Newswires

September 18, 2017 15:15 ET (19:15 GMT)