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Liberals urged to retaliate against Boeing, White House after Bombardier ruling

OTTAWA — The Trudeau government faced pressure Wednesday to fire back at Boeing and the Trump administration after the U.S. Commerce Department dealt a huge blow to Montreal aerospace firm Bombardier.
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OTTAWA — The Trudeau government faced pressure Wednesday to fire back at Boeing and the Trump administration after the U.S. Commerce Department dealt a huge blow to Montreal aerospace firm Bombardier.

But the Liberals showed no signs they planned to immediately retaliate against Boeing or President Donald Trump's White House, which trade experts say is the right move to ensure the dispute doesn't go from bad to worse.

The call to arms started after the Commerce Department ruled Tuesday that Bombardier benefited from improper government subsidies and proposed a 219 per cent duty on all CSeries planes entering the U.S.

The department's investigation was launched earlier this year after Boeing complained that Bombardier secured a deal for up to 125 of its CS100s with Delta Air Lines by offering the jets at below-market prices.

The penalties won't be official until the U.S. International Trade Commission rules next spring whether the deal hurt Boeing's business, but they sparked strong reactions in Quebec City and Ottawa.

Quebec Premier Philippe Couillard, whose government invested $1 billion for a 49.5 per cent stake in the CSeries line last year, blasted the ruling before urging the feds to take a harder line with Boeing.

"Not a bolt, not a part, (and) of course not a plane from Boeing (should be) entering Canada until this conflict is resolved in a satisfactory way," Couillard said.

"How could we justify doing business with a company that wants to destroy Canadian jobs in aerospace? I'm very happy Mr. Trudeau has reacted until now and I know he will continue doing the same."

Federal NDP leader Tom Mulcair was more aggressive, as he said the government needed to show it "had enough backbone to stand up to the bullying of Boeing and of the U.S. government."

Others such as Jerry Dias, the head of Unifor, Canada's largest private-sector union, also suggested the time had come for a muscular response to Boeing and the White House, which supported the ruling.

Dias was largely appreciative of the federal government's efforts to date, but said: "When you start messing with us in this way, we ultimately have to retaliate. And it's right around the corner."

Yet most of those in favour of stronger action were also vague when it came to specific actions. Dias said the government needs to "think it through" before making any decision.

The government has threatened to scrap the planned purchase of 18 Super Hornet fighter jets and even bar Boeing from federal contracts to pressure the firm to drop its case against Bombardier.

But it did not appear any closer to pulling the trigger on Wednesday and a senior official told The Canadian Press on background that the government intends to keep ratcheting up pressure in other ways.

Prime Minister Justin Trudeau said Foreign Affairs Minister Chrystia Freeland raised the dispute with U.S. Trade Representative Robert Lighthizer during North American Free Trade Agreement talks in Ottawa.

Trade experts said Canada is in a tough spot because while it has options, such as retaliating, talking to Boeing and following through with the dispute process, there is no good way forward.

While it might be tempting to engage in tit-for-tat actions against Boeing and the White House, the experts warn that could quickly escalate and ultimately cause more harm than good.

"There's no reason to respond and basically get Trump and company upset," said Patrick Leblond, a senior fellow at the Centre for International Governance Innovation. "As we know, when he gets upset, that's when he does weird and negative things.

"And to bar the company from doing business? They have to be very careful because let's not forget, there are a lot of Canadian companies that are suppliers to Boeing."

Negotiations are also unlikely to lead to a resolution, Leblond said, as Boeing seems intent on driving Bombardier out of business.

Most experts said the best course of action might be to simply hope that the U.S. International Trade Commission rules next year that Boeing was not hurt by the Bombardier-Delta deal.

"I tell you, I just find it really difficult to make a credible case that there is a genuine threat of injury from these aircraft being sold to Delta," said Daniel Pearson, who served on the commission from 2003 to 2013.

Yet there is also a slim chance that Boeing will win, which could put a stake through the heart of Bombardier and its CSeries jets.

"The problem for Trudeau and Bombardier," said Gary Hufbauer of the Peterson Institute for International Economics in Washington, "is if the ITC rules against them, that destroys the CSeries."

— Follow @leeberthiaume on Twitter.

Lee Berthiaume, The Canadian Press



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