The World Trade Organization agreed Friday to create a panel of experts to study Brazil's allegations that Canada's subsidies to aircraft builder Bombardier breach international trade laws.

 

The decision was reached during a meeting of WTO's Dispute Settlement Body following a second request from Brazil, which maintains that Canada has provided unfair support to Bombardier to the tune of at least $3.0 billion (2.5 billion euros).

Brazil's representative maintained Friday the Canadian support measures, including loans, grants and equity infusions, "have caused, continue to cause and threaten to cause even more extensive serious prejudice to the interests of the Brazilian aerospace industry, in clear violation of Canada's WTO obligations."

 

Canada's representative meanwhile voiced disappointment that Brazil had decided to push the WTO process further, insisting that the Canadian measures were fully consistent with international trade rules.

Brazil first raised concerns about the measures last February, a day after the Canadian government granted Bombardier a four-year loan of 372.5 million Canadian dollars ($283 million) at favourable terms.

After the two countries failed to reach an agreement on their own, Brazil first requested a WTO panel on the issue last month, but that request was slapped down by Canada.

According to WTO rules, a second request to establish a panel is basically guaranteed to go through.

Once created, WTO's panels of independent trade and legal experts usually take several months to render their decisions.

They can authorise retaliatory trade measures if they rule in favour of a plaintiff.

Source: AFP