WORLD TRADE WT/DS70/1
G/SCM/D11/1
ORGANIZATION 14March 1997
(97-1044)
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 4oftheAgreement onSubsidies andCountervailing Measures ("theAgreement") regarding
certain subsidies granted bytheGovernment ofCanada oritsprovinces thatsupport theexport ofcivilian
aircraft fromCanada. Article 3oftheAgreement prohibits subsidies contingent inlaworinfactupon
export performance. Information available totheGovernment ofBrazil suggests thatthefollowing
programmes maybeinconsistent withtherequirements ofArticle 3:
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 inde
Havilland, 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/D11/1
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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 4oftheAgreement, theGovernment ofBrazil requests consultations
withtheGovernment ofCanada todiscuss thismatter withtheintention ofreaching amutually
satisfactory result within the30dayscontemplated byArticle 4.4.
Inaseparate communication, Brazil isalsorequesting consultations withCanada concerning
theseprogrammes pursuant toArticle 7oftheAgreement. Thisseparate request isbeing made because
theAgreementprovidesseparateproceduresforconsultationsanddisputesettlementforsubsidiescovered
byParts IIandIII.TheGovernment ofBrazil desires thatArticle 4consultations takeplace within
thetimecontemplated bythatArticle, andwould welcome from theGovernment ofCanada any
suggestions itmaywishtomake concerning dates. ItisthehopeofBrazil thatthetwogovernments
latercould agree whether theArticle 3consultations could alsoserve asArticle 7consultations, or
whether itwould beadvisable toholdoneormore additional sessions forthatpurpose.