A team from Covington & Burling has sealed a win for Bombardier in proceedings before the International Trade Commission (ITC) in Washington, DC, after Boeing claimed the Canadian manufacturer had illegally dumped aircraft in the US.
The ITC found on 26 January that the US aviation industry was “not materially injured or threatened with material injury” by imports of Bombardier’s new C series aircraft, despite the Department of Commerce’s proposed 300% tariffs on the company’s planes.
The case dates back to April 2017, when Boeing, with counsel from Wilmer Cutler Pickering Hale and Dorr, petitioned the ITC to investigate Bombardier.
Boeing alleged the company was supported by unfair subsidies from the Canadian government and had illegally dumped 75 newly developed C series aircraft – billed as being more fuel-efficient and cheaper to run than rival planes – in the US at below market rate. The aircraft were bought by Delta Air Lines.
Bombardier has maintained that its products don’t pose a threat to Boeing because they are different to anything that Boeing has on the market, adding that Delta hadn’t shown any interest in the US manufacturer’s products.
In June, the ITC issued a preliminary decision that found reasonable indications that Boeing had suffered as a result of the C series imports and allowed the company to continue advocating for tariffs to be raised against Bombardier while commissioners deliberated.
The preliminary order also allowed the Department of Commerce to make its own declaration in September, when it proposed retaliatory import duties of 220% be levied on Bombardier’s imports to counterbalance the Canadian subsidies, following a further petition by Boeing.
Secretary of Commerce Wilbur Ross said at the time that the Trump administration took foreign government subsidies “very seriously”, adding that “even our closest allies must play by the rules”.
The next month, in what Bombardier described as an “egregious overreach”, the Department of Commerce added a further 80% in anti-dumping tariffs to the cost of Bombardier’s imports after finding it had sold its C series planes below cost. Boeing said these further duties were “a consequence of a conscious decision by Bombardier to violate trade law”.
However, following a hearing in December, the ITC reached a 4-0 verdict last week that no antidumping or countervailing duties would be issued against Bombardier. A public report by the commission is due to be notified on 13 February and will be published at the beginning of March.
In a statement, Bombardier labelled the ITC decision “a victory for innovation, competition, and the rule of law”, adding that the result cleared the way for European manufacturer Airbus to complete its projected acquisition of a majority stake in the C series programme.
Boeing, meanwhile, said it was “disappointed” with the ITC’s decision, adding that it “remains confident in the facts of our case and will continue to document any harm to Boeing and our extensive US supply chain that results from illegal subsidies and dumped pricing.”
“We will not stand by as Bombardier’s illegal business practices continue to harm American workers and the aerospace industry they support,” the statement reads, noting that the company would review the commission’s opinions when they became available.
A spokesperson for Boeing declined to elaborate on the statement and whether it meant the company planned to appeal the ITC decision. Were Boeing to appeal, it would have the option of either challenging the ruling in the US Court of International Trade in New York, or under chapter 19 of NAFTA, which deals with the review of antidumping and countervailing duty matters.
The ITC decision has also been welcomed by the Canadian Minister of Foreign Affairs Chrystia Freeland, who said it would “support well-paying middle-class jobs on both sides of the border.”
The Secretary of State for Northern Ireland Karen Bradley said the UK government had been “working tirelessly to safeguard Bombardier jobs and argued from the very start this case was wholly unjustified.” The Canadian company employs more than 4,000 workers at its facilities in Belfast.
The US Department of Commerce meanwhile has not commented publicly on the result, but Ross was quoted by Reuters as saying it “shows how robust our system of checks and balances is”.
Before the US International Trade Commission
100- To 150 Seat Large Civil Aircraft from Canada
- Chairman Rhonda Schmidtlein
- Vice Chairman David Johanson
- Commissioner Irving Williamson
- Commissioner Meredith Broadbent
Counsel to Boeing
- Wilmer Cutler Pickering Hale and Dorr
(Lead counsel) Patrick McLain
Counsel to Bombardier
- Covington & Burling
Counsel to Delta Air Lines
Counsel to Airbus
- Sidley Austin
Counsel to the Canadian government
- Steptoe & Johnson
- Curtis Mallet-Prevost Colt & Mosle
Counsel to the government of Quebec
- Arent Fox
Counsel to Caisse de depot et placement du Quebec
- Hogan Lovells
H. Deen Kaplan
Counsel to the UK government
- Steptoe & Johnson