Bombardier — House of Lords, 2017-10-10
Topic: Foreign Trade
Jonathan Mendelsohn (Labour, Centre-left): My Lords, I thank the Minister for repeating the Statement made by the Secretary of State in the other place. It sets out the case very well indeed. I am sure the whole House welcomes the Government’s commitment to resolve this trade dispute between Boeing and Bombardier as swiftly as possible Indeed, this dispute is of great concern to the 4,200 Bombardier employees in Northern Ireland, their families and the communities in East Belfast, Newtownabbey, Dunmurry and Newtownards. For so many jobs at one of Northern Ireland’s largest employers to be placed at risk is a matter of real concern, as are the wider potential economic impact and, in the case of Northern Ireland, the potential political repercussions. Bombardier represents 8% of Northern Ireland’s GDP and 40% of its manufacturing base and supports 20,000 more jobs in the wider supply chain across the country. There is a great deal at risk. Bombardier acquired the Shorts facility in 1989. The Shorts heritage goes back over 100 years and the Belfast base was established in 1948. It is a centre of excellence and many other leading businesses in the aviation and defence sectors owe their excellent performance and existence to the Shorts—now Bombardier—facility The aviation sector is important to our country and it has great potential. We have Airbus facilities, a Boeing facility in Sheffield and the Bombardier facility. Aviation expertise, world-leading engineers and an experienced and seasoned workforce create the potential for this sector to be a real opportunity for us. This dispute and recent news regarding BAE and Monarch do not represent the collapse of the aviation industry but do not bode well for those of us who want to see it thrive in the years ahead. Does the Minister agree that a sector deal, with a particular focus on supply-chain issues and infrastructure requirements, would be helpful in this context I want to make it very clear that we on these Benches unreservedly take the view that Bombardier is being challenged on a case that has no merits and that the US Department of Commerce’s initial determinations are flawed and without justifiable foundation. It is clearly specious to suggest that there is harm or potential harm to Boeing in a sector where it does not have a competitor product; nor can there be any doubt that the UK’s vigorous adherence to state aid rules means that any support provided to the Bombardier facility does not contravene trade rules We hope that the key actors in this see sense and either withdraw the complaint or abandon the US Government’s flawed process, and that this is resolved as quickly as possible to ensure that any harm is minimised. But hope is not enough and we need to be steadfast in our action. We offer the Government our support and help and we recognise that there has been some considerable effort: 24 interactions with the US Government, including two with the President, as well as 12 with Boeing and 10 with other key actors, including the EU. But we have concerns about the effectiveness of the approach and would like some assessment from the Government of whether they feel that anyone is listening or even that the process itself is fair. We acknowledge the role of Canada, as well as the help of the trade unions, but we would be grateful if the Minister could also tell us how much support, and to what level, the Government are seeking from the European institutions. Have the Government asked the EU to consider taking steps in relation to its trade with the US We recognise that Boeing is a very welcome inward investor to the UK and we have a significant and long-standing relationship. We would like it to increase the size, scale and scope of its Sheffield facility, and to see it flourish. But the conduct we have seen from it is not what we would expect of a supplier. We would be grateful if we could understand from the Minister what further interactions we have had with Boeing and when the most recent ones were In relation to the US Government, have the Government taken a view on whether or not this process has been used because of the weakness of the merits of the case? It is noticeable that unlike most disputes in the aviation sector, which take place at the WTO, this one is a US government approach. Surely the US Commerce Secretary’s recent comments in support of the action and the determination of the tariffs suggest that this process may have been used for a reason. In discussions with the US Government, have Ministers seen any evidence of US government encouragement of Boeing? Can the Minister tell us, in the case of such disputes, on how many occasions, either by number or percentage, has the final decision overturned a provisional decision? Can the Government suggest what their plan would be if the final decision confirmed the provisional declaration? What would be the strategy in the United States? Have the Government sought the advice of expert US trade lawyers or advisers Does the Minister agree with me that actually, the fundamental problem here is one of market structure? Boeing has such a large market share that it prices on the basis of monopolistic control, actively supported by eye-watering subsidies from the US Government— a rather familiar tale of locking everyone out to favour the dominant incumbent. This country has benefited from a more open market, with Airbus, Boeing and Bombardier having meaningful facilities here, and this US-led action demonstrates not only its determination in defending its interests but how quickly it can sometimes apply protectionism. It raises questions about its commitment to a new, fair and reasonable trade deal. Finally, can the Minister confirm that this point has been forcefully made to the US Government during the discussions?