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Canada put Boeing on notice that it will be at a “distinct disadvantage” in bidding to replace the country’s aging fleet of fighter jets because of its trade dispute against Bombardier, the Canadian jetmaker.
Canada announced on Tuesday in Ottawa that it would follow through on threats to abandon plans to have Boeing provide Super Hornet fighter jets as a stopgap measure until bidding is launched for the full fleet replacement. Canadian ministers said Ottawa plans to buy 18 used Australian F-18 fighter jets instead.
Boeing said last week that it had given up on winning that interim contract but made clear it still hoped to be in the running for the permanent fleet replacement. But Canada on Tuesday introduced a new provision for bidders, under which firms that are causing “economic harm to Canada” will be “at a distinct disadvantage” in the bidding.
Government officials made clear Boeing would not be excluded from bidding but said they hoped the new provision would act as an incentive to firms to avoid “causing economic harm” at the time of bidding.
Canada’s decision is the most recent casualty in a trade battle between the US aircraft maker and Canadian plane maker Bombardier that has exacerbated tensions between Washington and Ottawa. Earlier this year, the Chicago-based aircraft maker filed a trade complaint with the US Commerce department which led to the preliminary imposition of stiff import tariffs on Bombardier’s C Series aircraft.
The fallout from the dispute over C Series tariffs has already led to a major realignment in the global aircraft industry. It forced Bombardier, Canada’s Quebec-based national aircraft champion, to sell control of the C Series programme to Airbus. That deal, aimed at circumventing US tariffs, gave the European group an important new ally in its battle with rival Boeing for global aircraft sales.
The decision to sell control was taken after the Trump administration sided with Boeing in the trade dispute, imposing preliminary tariffs totalling 300 per cent on the C Series. The dispute between Boeing and Bombardier is one of several that have emerged since the election of President Donald Trump, who has vowed to revamp trade relations with Canada.