March 23, 2018 / 1:50 PM / a month ago

Canada calls end to trade case positive for 'longstanding' Boeing ties

MONTREAL, OTTAWA (Reuters) - Canada on Friday welcomed as a “positive development” in its long ties with Boeing (BA.N) a decision by the U.S. planemaker to end a trade dispute over sales of Bombardier (BBDb.TO) CSeries jets in the United States.

FILE PHOTO: A Bombardier logo is seen at the Bombardier plant in Belfast, Northern Ireland January 26, 2018. REUTERS/Clodagh Kilcoyne

Boeing said late on Thursday it will not appeal a U.S. trade commission ruling that allows Bombardier to sell its CSeries in the United States without hefty duties. A Boeing spokesman did not give a reason.

The decision “represents a positive development in the longstanding relationship between Canada and Boeing,” Canadian Minister of Foreign Affairs Chrystia Freeland said in a statement, in a sign of warming by the country’s Liberal government toward the planemaker after tensions over the Bombardier dispute.

It was not clear how Boeing’s decision might affect its chances in a Canadian competition to order fighter jets worth between C$15 billion ($11.68 billion) and $C19 billion.

FILE PHOTO: Boeing's logo is seen during the Japan Aerospace 2016 air show in Tokyo, Japan, October 12, 2016. REUTERS/Kim Kyung-Hoon/File Photo

Representatives for Canada’s Procurement Minister Carla Qualtrough and Defense Minister Harjit Sajjan - who share responsibility for buying military equipment - did not immediately respond to requests for comment.

Ottawa has said bids will be evaluated in part by whether firms have caused any past economic damage to Canada - a clear reference to the U.S. planemaker.

    In its case against Bombardier, Boeing had argued the CSeries benefited from unfair subsidies and was sold below cost to American carriers, heightening trade tensions between the planemaker, the United States and its allies Canada and the United Kingdom. The wings for the 110-130 seat jet are produced in Belfast.

    “Boeing should feel suitably chastened that their bullying approach was justly and robustly rejected,” said Gavin Robinson, a lawmaker from Northern Ireland’s Democratic Unionist Party, in a statement on Friday.

    Boeing Chief Executive Dennis Muilenberg told Reuters earlier this month it would sue Bombardier again if provoked to do so by what it deems unfair pricing, but trade analysts have also said the planemaker seemed anxious to smooth over the dispute.

    U.S. aerospace analyst Richard Aboulafia said the trade dispute might not generate long-term damage for Boeing.

    “I think mistakes were made,” he said. “But there aren’t a lot of alternatives. And memories aren’t that long in aerospace and politics.”

    Earlier in the day, Bombardier said in a statement it was happy that Boeing’s “meritless claim” had “come to an end.”

    Airbus SE (AIR.PA) has agreed to take a majority stake in the CSeries in a deal expected to close later this year, while Boeing is in tie-up talks with Bombardier’s Brazilian rival Embraer SA (EMBR3.SA).

    Reporting by Allison Lampert and David Ljunggren; Additional reporting by Tim Hepher in Paris and Conor Humphries in Dublin; Editing by Susan Thomas and Frances Kerry

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