The Brazilian Government has asked the World Trade Organization to investigate its allegations that Canada is providing trade-distorting subsidies to aircraft manufacturer Bombardier.

Brazil requested the establishment of a panel to examine numerous measures through which, it alleges, Canada has provided subsidies to Bombardier to develop, launch, and preserve Bombardier's C-Series aircraft program. Brazil said that this had caused significant distortions in the commercial aircraft market and had seriously prejudiced Brazil's export interests.

Canada said that it was disappointed that Brazil had requested the establishment of a panel, that its measures were consistent with its WTO obligations, and that it was not in a position to agree to the establishment of a panel at the present meeting.

Following the objection by Canada, the DSB deferred the establishment of a panel.

If the World Trade Organization eventually finds in favor of Brazil, the case could open the door to the introduction of countervailing duties on Canadian exports or other trade remedy measures, and Canada would be compelled to withdraw the subsidies.

Source: Global Tax News