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Embraer Not Playing Fair  
User currently offlineCYLW From Canada, joined Apr 2000, 442 posts, RR: 0
Posted (14 years 3 months 5 days ago) and read 1337 times:

Canada set to slap sanctions over jet dispute with Brazil

WebPosted Wed Nov 29 21:20:59 2000

OTTAWA - After talks broke down Wednesday in Rio de Janeiro, the Canadian government said that the time for talking is over and the time for sanctions is here. Canada will impose sanctions of up to $344 million a year on Brazil over its ProEx subsidies to jet makers.

Last August the World Trade Organization (WTO) granted Ottawa permission to impose sanctions. The purpose of the sanctions is to compensate Canada for Brazilian export subsidies for regional jets made by Embraer.

The conflict focused initially on government subsidies to both Embraer and Bombardier. The WTO ruled that both countries' programs violated international open trading rules. Both countries modified their programs, but still accused each other of breaching WTO rules. In July, a WTO panel ruled in Canada's favour.

Brazil is supposed to unveil a new subsidy program next month, but Canadian government officials still contend that the new ProEx replacement program is unfair.

Brazil's Embraer, the world's fourth largest civil aircraft maker, competes directly with Bombardier Inc., the number three aircraft maker worldwide. Bombardier controls just over half of the regional jet market, which is the fastest growing segment of the aircraft market. The more efficient regional jets hold between 35 and 90 passengers and are used on shorter-haul flights between urban centres.

Before it can apply the sanctions, Canada must apply to the WTO's Dispute Settlement Body (DSB) for permission. The country must request permission before the DSB meets on Dec. 12.

No other talks are planned between the two parties.

Bombardier's shares closed down down 50 cents to $22.90 on Wednesday.

8 replies: All unread, jump to last
User currently offlineSlawko From Canada, joined May 1999, 3801 posts, RR: 8
Reply 1, posted (14 years 3 months 4 days 17 hours ago) and read 1257 times:

This is nothing new, and even after the world court ruled against EMB, the Brazilian government continues to provide subsidies to EMB. It's a shame that they can not play fair....

"Clive Beddoe says he favours competition, but his actions do not support that idea." Robert Milton - CEO Air Canada
User currently offlineLubicon From Canada, joined Oct 2000, 197 posts, RR: 0
Reply 2, posted (14 years 3 months 4 days 16 hours ago) and read 1252 times:

Let's not forget that the Canadian government has given hundreds of millions of dollars to Bombardier in the form of loan guarantees and grants too. The Brazilians bring that up when we go after them. Not saying they are right, but fair is fair.....

User currently offlineWorldTraveller From Germany, joined Jun 1999, 624 posts, RR: 5
Reply 3, posted (14 years 3 months 4 days 16 hours ago) and read 1247 times:

Does anybody else sees Airbus vs Boeing #2 on the horizon...?

the WorldTraveller

User currently offlineCorey777 From , joined Dec 1969, posts, RR:
Reply 4, posted (14 years 3 months 4 days 15 hours ago) and read 1240 times:

I think Bombardier and Embraer already are the Boeing and Airbus of the RJ/turboprop world. Instead of east vs west, it's north vs south.


User currently offlineWatewate From Canada, joined Nov 2000, 2284 posts, RR: 1
Reply 5, posted (14 years 3 months 4 days 14 hours ago) and read 1229 times:

Agreed, Bombardier was given a lot of preferential treatments over the years by the federal government. Lands were given away for virtually nothing in Quebec- Quebec gov't was worried that Ontario would have undercut them.
Same goes for Brazil. If both parties want to play dirty- what can people really do about it? Boeing and Airbus are goings at it for decades. It won't be any different for Bombardier and EMB

User currently offlineSlawko From Canada, joined May 1999, 3801 posts, RR: 8
Reply 6, posted (14 years 3 months 4 days 3 hours ago) and read 1198 times:

Who has better planes is not at issue here, this post is about weather or not the subsidies are legal. And the answer is no, When Canada was subsidising Bombardier, EMB took them to the world court, and Canada lost the case, it was ruled that the programs in both countries were illegal, and were to be stopped. Unfortunatly this has not happned in Brazil, where the government (a) Agreed to stop the subsidies, but only on new orders, not the existing ones, and then (b) Decided that they were not going to stop the subsidies at all on old or new orders.

If Brazil wants to earn the respect of other nations, and show that they are worth investing in, then they should play fair, and follow the rulings that they themselves asked for in the world court.

"Clive Beddoe says he favours competition, but his actions do not support that idea." Robert Milton - CEO Air Canada
User currently offlineWatewate From Canada, joined Nov 2000, 2284 posts, RR: 1
Reply 7, posted (14 years 3 months 4 days 2 hours ago) and read 1194 times:

Agree with Slawko.

I'm a Canadian, but I sympathize with Brazillian gov't somewhat. EMB is pretty much the only good thing they have going in that country. Economy is in the tank, and EMB is providing valuable dollars. But I still disagree with their gov't policy regardless.

User currently offlineMiller22 From United States of America, joined Nov 2000, 724 posts, RR: 4
Reply 8, posted (14 years 3 months 3 days 18 hours ago) and read 1183 times:

Embraer is a direct result of Bombardier. Comair nudged Bombardier to get the RJ market going and as soon as the fire was lit, they couldn't fulfill all of the orders. The alternative arose for other regionals to get their hands on an RJ, and that was Embraer. They couldn't get a CRJ because of the waiting list. Embraer is just kinda "second best" in the RJ world. However, demand is so great, that they aren't gonna have trouble selling planes.

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