October 1, 2017 / 3:41 PM / 2 years ago

Caught in the crossfire, Britain says will fight Boeing-Bombardier row

MANCHESTER, England (Reuters) - Britain, caught in the crossfire of a damaging trade dispute between planemakers Boeing (BA.N) and Bombardier (BBDb.TO), said on Sunday it would fight its corner to protect thousands of jobs put at risk in Northern Ireland.

FILE PHOTO - A combination photo of a Boeing 737 MAX Before the opening of the 52nd Paris Air Show at Le Bourget airport near Paris, France, June 16, 2017, and shareholders line up to view Bombardier's CS300 aircraft following their annual general meeting in Mirabel, Quebec, Canada April 29, 2016. REUTERS/Pascal Rossignol/Christinne Muschi/File Photo

Trade minister Liam Fox said Britain was working to find a resolution after the United States last week responded to a complaint by Boeing by imposing a 220-percent preliminary duty on Bombardier’s CSeries jets, whose wings are made in Belfast.

“We’ve said that we will fight our corner,” Fox told the annual Conservative Party conference. “We’ve been caught in the crossfire of a much larger dispute.”

“It worries me that we’re seeing a rise in protectionist behavior ... the OECD (Organisation for Economic Cooperation and Development) itself has pointed out protectionism always ends badly. If we can get them to have a resolution, which is what we are trying to do quietly, so much the better.”

The tariff, which will take effect only if the U.S. International Trade Commission backs Boeing in a final decision expected in 2018, has dealt a major blow to the Canadian company’s flagship project.

It has also cast a huge shadow over Northern Ireland, where Bombardier is by far the most important manufacturer and a pillar of Belfast’s economy, employing 4,200 people and supporting thousands more in the supply chain.

And it also undermines the assurances by Brexit campaigners such as Fox that free trade and London’s close ties with Washington will drive Britain’s prosperity and global influence after it leaves the European Union in 2019.

James Brokenshire, the British minister for Northern Ireland, echoed Prime Minister Theresa May in saying that Boeing was not behaving in a way the British government would expect a long-term defense partner to behave.

May and other senior ministers have been highly critical of Boeing, suggesting it could miss out on future defense contracts, after the row put into jeopardy the local economy in Northern Ireland, home to a small party that May relies on to govern in Westminster.

“I say to Boeing this case is unjustified and unwarranted. This action is not what is expected of a long-term partner to the UK. They need to get round the table and secure a negotiated outcome to this dispute quickly,” Brokenshire said.

May has warned that Boeing was undermining its commercial relationship with Britain and has spoken to U.S. President Donald Trump on the issue.

However, May is unlikely to retaliate against Boeing, which says the firm and its suppliers account for more than 18,700 jobs in the UK. Fox implied the government was working behind the scenes to find a resolution.

Northern Ireland is the poorest of the United Kingdom’s four parts and is mired in political difficulties after emerging from decades of armed sectarian conflict.

Boeing, the world’s largest aerospace company, says it is upholding trade rules and not trying to damage the CSeries. It accuses Canada and Britain of unfairly subsidizing Bombardier and says Bombardier has illegally dumped its products in the U.S. single-aisle airplane market out of desperation.

“The support that the UK provided to the Bombardier operation in Belfast was and remains compliant with international requirements,” Brokenshire said.

Editing by Elizabeth Piper and Dale Hudson

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