Bombardier — House of Lords, 2017-10-10
Topic: Foreign Trade
James Younger (Conservative, Centre-right): My Lords, with the leave of the House I shall now repeat a Statement made in the other place by my right honourable friend the Secretary of State for Business, Energy and Industrial Strategy. The Statement is as follows: "With permission, Mr Speaker, I want to update the House on the trade dispute brought by Boeing against Bombardier. The case has serious implications for the workers at Bombardier Aerostructures & Engineering Services—Short Brothers—in Belfast, where the wings for the C Series aircraft are manufactured. Following a complaint by Boeing Inc, the US Department of Commerce has made two provisional determinations in the case, calculating duties of 220% in relation to alleged subsidies for Bombardier and of nearly 80% in relation to alleged mis-selling by Bombardier into the US market. These initial determinations are bitterly disappointing, but they are only the first step in the process: a final ruling in the investigation is due in February and would be subject to further appeal. This Government have been working tirelessly to bring the case to a satisfactory resolution In filing its petition, Boeing asserted three claims: first, that without Canadian and UK Government subsidies Bombardier would have been unable to develop the C Series; secondly, that Bombardier is selling at or below production cost its C Series aircraft in the US; and thirdly, as a result, that this is causing the threat of imminent material injury to the US domestic aerospace industry. This action followed Bombardier securing an order from Delta Airlines for 75 aircraft. The Boeing petition makes allegations about funding support from the Canadian federal Government and the Government of the Province of Quebec for the Bombardier C Series. It also alleges that the UK Government’s provision of £113 million of repayable launch investment funding, committed to Bombardier Short Brothers in 2009 to support the development of the composite wings, contravened trade rules. We strongly and robustly refute this accusation I want to make the Government’s position very clear: we consider this action by Boeing to be totally unjustified, unwarranted and incompatible with the conduct we would expect of a company with a long-term business relationship with the United Kingdom. Boeing does not manufacture a competing aircraft, so although Boeing claims harm in respect of the Delta aircraft order, it has no product in the 100 to 125-seat sector. Furthermore, this system of launch investment for the development of new aircraft reflects that of all major commercial aircraft programmes in their early years, including the Boeing 787. We refute entirely any suggestion that our support contravenes international rules The Shorts factory in Belfast employs more than 4,200 skilled workers, with almost a quarter of those working on the C Series. It also supports a supply chain of hundreds of companies and many more jobs in the UK, as well as supporting nearly 23,000 workers in the US, where 53% of the content of the C Series is produced by US-based companies. We will continue to work tirelessly to safeguard jobs, innovation and livelihoods in Northern Ireland From the outset this has been a dispute that joins Canada and the UK, and we have been assiduous in working closely with the Government of Canada in our response. The Prime Minister has discussed the case with Prime Minister Trudeau, and I have been in regular contact with Canadian Foreign Minister, Chrystia Freeland, to co-ordinate our response and actions. We have had intensive engagement from across government at the highest levels. The Prime Minister has discussed the matter twice with President Trump, stressing the crucial importance of Bombardier’s operations in Belfast and asking the US Government to do all they can to encourage Boeing to drop its complaint. My Cabinet colleagues, my right honourable friends the Foreign Secretary, the Defence Secretary, the Chancellor of the Exchequer, the Trade Secretary and the Northern Ireland Secretary, and myself have reinforced our serious concerns with the US Secretary of Commerce, the US Secretary of State, the US Treasury Secretary, the US Trade Representative and other members of the Administration, as well as with the EU Trade Commissioner. The Minister for Energy and Industry has met Boeing International’s president, and I travelled to Chicago to meet Boeing’s president and chief executive to make clear the impact of this on our future relationship with the company I am grateful for the consistent and indefatigable efforts of the honourable Member for Belfast East and the whole community in Northern Ireland, who are united in opposition to this action. We will continue vigorously and robustly to defend UK interests in support of Bombardier, its workforce in Belfast and those in its UK supply chain. We will continue to work jointly and collectively with the Canadian Government. We will work closely with Bombardier, its workforce and its trade unions, and we will do everything we can to bring about a credible, early resolution of this totally unjustified case. The initial determinations are the first step in the process, but we completely understand the worry and uncertainty facing the workforce, which means that the earlier this issue can be resolved, the better. To that end, I expect to have further discussions with Boeing, Bombardier, the Canadian Government and the US Government in the days ahead. The House should be aware that neither the Government nor our counterpart in Canada will rest until this groundless action is ended. I commend this Statement to the House".