WORLD TRADE WT/DS71/1
G/SCM/D12/1
ORGANIZATION 14March 1997
(97-1045)
Original: English
CANADA -MEASURES AFFECTING THE EXPORT
OFCIVILIAN AIRCRAFT
Request forConsultations byBrazil
Thefollowing communication, dated 10March 1997, fromthePermanent Mission ofBrazil
tothePermanent Mission ofCanada andtotheDispute Settlement Body iscirculated inaccordance
withArticle 4.4oftheDSU attherequest ofthePermanent Mission ofBrazil.
_______________
TheGovernmentofBrazilherebyrequestsconsultationswiththeGovernmentofCanadapursuant
toArticle 7oftheAgreement onSubsidies andCountervailing Measures ("theAgreement") regarding
certain subsidies granted bytheGovernment ofCanada oritsprovinces thatsupport theexport ofcivilian
aircraft from Canada. Thefollowing programmes are,inBrazil 'sview, actionable subsidies within
themeaning ofPartIIoftheAgreement, andcause adverse effects within themeaning ofArticle 5
oftheAgreement:
1. Export Development Corporation (EDC) equity infusions intocorporations specially established
tofacilitate theexport ofaircraft;
2. EDC loanguarantees forexported aircraft;
3. Support from theCanada Account toCanadair anddeHavilland, bothCanadian aircraft
manufacturers, owned inwhole orinpartbyanother Canadian aircraft manufacturer,
Bombardier;
4. An$87million interest freeloanfrom theGovernment ofCanada totheCanadian aircraft
manufacturer Bombardier which isrepayable onlyoutofanyprofits thatmaybemade from
thesaleofaircraft;
5. ADecember 1996 subsidy of$57million from theGovernment ofCanada toBombardier to
develop a70-passenger version ofthefirm'sDash 8regional aircraft;
6. Theimpending saletoBombardier, bytheGovernment ofOntario, ofitsinvestment in
deHavilland, onother thancommercial terms;
7. A$147million subsidy announced inJanuary 1997toPratt&Whitney ofCanada todevelop
engines forcommuter jetaircraft produced byBombardier andaffiliated companies;
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G/SCM/D12/1
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8. BenefitsconferredonBombardierundertheCanada-QuebecSubsidiaryAgreementonIndustrial
Development;
9. Benefits conferred onBombardier bytheGovernment ofQuebec under theSociété de
Développement Industriel duQuébec, including its"PREP" programme ("programme d'appui
àlareprise") which isavailable onlyforexport activities.
Inaccordance withArticle 7,including Article 7.3,oftheAgreement, theGovernment ofBrazil
requestsconsultationswiththeGovernmentofCanadatodiscussthismatterwiththeintentionofreaching
amutually satisfactory result within the60dayscontemplated byArticle 7.4.
Inaseparate communication, Brazil isalsorequesting consultations withCanada concerning
theseprogrammes pursuant toArticle 4oftheAgreement. Thisseparate request isbeing made because
theAgreementprovidesseparateproceduresforconsultationsanddisputesettlementforsubsidiescovered
byParts IIandIII.Asnoted inthatcommunication, theGovernment ofBrazil desires thatArticle 4
consultations takeplace within thetimecontemplated bythatArticle, andwould welcome from the
Government ofCanada anysuggestions itmaywishtomake concerning dates. ItisthehopeofBrazil
thatthetwogovernments latercould agree whether theArticle 3consultations could alsoserve as
Article 7consultations, orwhether itwould beadvisable toholdoneormore additional sessions for
thatpurpose.