The British
Prime Minister Theresa May criticized Boeing’s trade war on Bombardier on
Thursday.
She said
Boeing’s legal demand for an import tax is “not the kind of behaviour we’d
expect from a long-term partner.” May’s criticism comes in the aftermath of a
warning by her Secretary of Defense, Michael Fallon, that the UK will review
defense contracts with Boeing if the US Department of Commerce goes ahead and
imposes a 220% import tariff on Canadian planes, tripling their cost.
In turn,
that would jeopardize a €5bn order from Delta Airlines, for 125 jets. Delta
Airlines says there is no competition between Boeing and Bombardier in the
specific aircraft type, because Boeing does not produce smaller 100-110 seat
aircraft.
“We don’t want to do that,” Fallon said,
making clear that London would prefer a “negotiated settlement.”
The
Canadian Prime Minister, Justin Trudeau, has also threatened to cancel the
purchase of 18 Boeing Super Hornet jet fighters from Boeing.
Jobs in Northern Ireland
The
Canadian Bombardier is a major employer in the North of Ireland and Theresa
May’s government relies on the parliamentary support of the Democratic Unionist
Party. Bombardier has a factory in Belfast that employs over 4,000 people.
Boeing has
argued that Bombardier’s C-Series Aircraft benefitted from both British and
Canadian subsidies and the competition is not on a “level playing field.”
Bombardier did receive support from Quebec’s provincial government in 2015.
At least
1000 jobs in Belfast are tied to this Aircraft, the BBC reports.
A final
choice by the US Department of Commerce on the case is due on 5 October. Then
it will be up to the US International Trade Commission to either uphold the
penalty or remove it in February.
Brexit angle
The threat
of a trade war between the US, Canada, and the UK comes amidst Brexit talks.
During the last year, the UK has invested considerable political capital
promoting the image of the UK as a trading nation that would boost relations
with the rest of the world rather than Europe alone.
During the
Labour party conference in Brighton on Wednesday, Jeremy Corbyn questioned the
UK’s “special relationship” with the US by making reference to the Bombardier
case.
“The Prime Minister is betting the economic
future on a de-regulated trade deal with US might want to explain how 220%
tariffs are going to boost our exports from the country,” Corbyn said according
to the Belfast Daily Telegraph.
https://www.neweurope.eu/article/uk-joins-canada-boeing-bombardier-dispute/