WTO opens panel into alleged Bombardier subsidies at Brazil's request

The World Trade Organization (WTO) has agreed to look into allegations from Brazil that the Canadian government has unfairlysubsidized Bombardier's CSeries jet program.

The Geneva-based trade body will establish a panel to look into allegations brought forth by the South American nation that Montreal-based Bombardier was the beneficiary of more than 25 government programs to the tune of more than $3 billion US in subsidies, which putBrazilian plane maker Embraer SA at a disadvantage.

Bombardier "has received subsidies from local governments that have allowed Bombardier to sell its aircraft at artificially low prices," Embraer says, adding that the alleged subsidies are an "unsustainable practice that distorts the entire global market, harming competitors at the expense of Canadian taxpayers."

The trade body will now name a three-person panel to rule on the matter.

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When asked forreactionto thenews, Bombardier issuedthe following statement to CBC News."We are confident that the investments and contribution programs mentioned in Brazil's petition are in full compliance with all WTO and international trade rules," the companysaid."We have the best aircraft and we will keep building on its success in service and in the marketplace."

The WTOmove comes on the heels of astunning decision earlier this week from the U.S. Commerce Department to slap duties of more than 220 per cent on the sale of the jets in the UnitedStates, after American jet maker Boeing made a similar complaint.

"We believe that the decision of the Commerce Department reinforces the Brazilian Government's claim in the panel opened today at the WTO," EmbraerCEO Paulo Cesar Silva said.

Bombardier announces big Q400 order

The WTO news comes on what would have otherwise been a day of good news for Bombardier, as the company announced early Friday that Indian airline SpiceJethad placed an order for up to 50 Bombardier Q400 planes.

SpiceJet has agreed to buy a firm order of 25 of the turboprops, with an option for 25 others. If it buys 50, it would be Bombardier's biggest single sale of Q400s ever valued at$1.7 billion.