April 27, 2017, © Leeham Co.: The Boeing Co. late today filed a petition with the US government, charging Bombardier with “dumping” the CSeries in its deal last year with Delta Air Lines for 75+50 CS100s. Delta can convert the order to the larger CS300, which competes with Boeing’s 737-700/7 MAX.
Boeing claims Bombardier sold the airplanes for about $20m, against a cost to build the airplanes of about $33m.
The 1,039 page complaint cites as one of its references Leeham News and Comment. A redacted, 147 page version may be downloaded here: BBD Complaint 042717.
A Wall Street Journal article and Financial Times article summarize the complaint.
Boeing’s press statement is below the jump.
Boeing competed in the Delta competition, offering a combination of used Boeing 717s and, LNC believes, new 737-700s. The fully amortized -700s can be offered at a very low price, compared with the new 737-7 MAX (which at that time was the 125-seat, two-class version, not the 149-seat configuration it has since become). Boeing beat Bombardier in a hot contest at United Airlines, predating the Delta deal, by offering the -700 at a rock-bottom price believed to be in the $24m range, a price Bombardier could not then match. (A United official denied the $24m price to LNC, but others cited this number.)
Since the United deal, Bombardier received investments from the Quebec provincial and federal governments specifically tied to the CSeries, and more than US$1bn from a quasi-government pension fund for a stake in Bombardier’s rail unit. The investments are widely considered to be bailouts that prevented Bombardier from declaring bankruptcy due to cost overruns and delays from the CSeries and Global corporate jet development programs.
Bombardier took a US$500m “onerous contract charge” in connection with the Delta order and one from Air Canada.
Rival Embraer immediately cried foul and alleged the government monies violate World Trade Organization rules. Bombardier says the financial structures comply with WTO rules. Brazil, at the behest of Embraer, filed a formal complaint with the WTO. Boeing, while not filing its own WTO complaint, joined in the action, according to press reports at the time.
Boeing’s action today so far is limited with the US government.
April 27, 2017
Boeing today issued the following statement regarding its petition to the U.S. Department of Commerce and the U.S. International Trade Commission (ITC) seeking investigations into the subsidization and pricing of Bombardier C Series airplanes and an antidumping, countervailing duty order against the sale of those aircraft in the U.S. market:
“Boeing is asking the Department of Commerce and the ITC to take action to end Bombardier’s illegal and unfair business practices before it is too late to prevent significant harm to America’s aerospace industry and thousands of good-paying aerospace jobs.
“Bombardier has embarked on an aggressive campaign to sell C Series aircraft into the U.S. market at absurdly low prices – less than $20 million for airplanes that cost $33 million to produce, based on publicly available information. Notably, it is selling the aircraft into the United States at prices that are millions lower than those charged in Canada – the very definition of dumping.
“As a result, Boeing and its extensive U.S. supply chain of more than 13,000 companies face a competitive threat that will only grow in magnitude as Bombardier increases its production rate for this aircraft. Bombardier has announced plans to boost C Series production from seven airplanes in 2016 to between 90 and 120 airplanes by 2020.
“Substantial government subsidies have enabled Bombardier’s predatory pricing of the C Series, which competes directly with American-made 737-700 and 737 MAX 7 airplanes. The C Series has received extensive government support totaling more than $3 billion so far. Bombardier launched the program in 2005 with hundreds of millions of dollars from the Canadian, Quebec and UK governments, and it has received additional government support every step of the way, including $2.5 billion in 2015 from the Government of Quebec.
“Bombardier has a long history of relying on government subsidies to compete in the marketplace, but the subsidies for its C Series program dwarf all those Bombardier has received previously. Equity infusions from government coffers not only rescued the program but have given Bombardier the resources it needs to aggressively target the U.S. market.
“The U.S. antidumping and countervailing duty statutes are designed to address precisely this type of predatory behavior.”
I love how aerospace companies throw mud at their competition over government subsidies when they all get them.
I suppose if BBD was dumping these aircraft by selling below cost, then Boeing was guilty of the same thing with its sales early on the learning curve on the 787 where they were sold far below their production cost.
This is a new one for Boeing, using the ‘dumping’ provisions. Previously the Airbus-Boeing conflict was over the WTO trade provisions about ‘state aid’
They must think a Trump Wjiehouse will look favourably on their claim… and act more swiftly.
Quebec might just find some faults in its interconnect lines bring power into the Northeast US ?
How much were those early 787s sold for in numbers.
No offense to Boeing but they always come across as the big drama queen of thr aviation business. Seems like their PR team is run by teen trollers.
Does anyone know the sale price of those early build 787s?
A typical rule of thumb is about half the list price. For the early build, it may be even larger since these aircraft are heavier and are less fuel efficient than the later ones.
Boeing accumulated about 32 billion in deferred production for about the first 400 aircraft. This is 90 million per aircraft on average.
How hypocritical of Boeing!
That’s right they’ve never offered 737s or 777s on the cheap!
Regarding the cited 24 respectively 33 million USD: is that with or without engines?
@Schorsch: With engines
So how much do you think United paid to convert their 700s into 800s?
My guess is ‘zero’, after United started looking at ‘alternatives’ to their A350 order.
If I understand things correctly, by going with dumping accusations, Boeing could get the US government to impose interim compensatory duties on future CSeries sales to US carriers, even before the case is resolved. This would effectively kill all CSeries sales in the US for now.
The same thing is happening now and has happened in the past with canadian exports of soft wood lumber to the US.
Same for European high-grade steels. The problem here is US did not even produce such kind of steel.
Boeing is telling the truth:
Boeing “face a competitive threat that will only grow in magnitude as Bombardier increases its production rate for this aircraft” but missed to mention that also Bombardier has an extensive U.S. supply chain.
Canada may rethink its interim F-35 solution the F/A-18 and look for Eurofighter, Gripen or Rafale. Air Canada also has about 60 MAX on order. According to WTO rules Canada can oppose counter actions.
Finally I want to mention the last WTO decision about the Washington state tax cuts: NO-NO!
That would be ironic considering how many European countries buy US fighters.
Maybe the Canadian government can apply enough duties on Boeing products to get Air Canada to cancel the 737 order. That would be a boon to the poor economy-class passengers!
No doubt, an Embraer E jet or Bombardier C Series would provide a much better experience for economy passengers any day.
No offense, but the Canadians would be better off with four squadrons of Otters, and two of Twin Otters. (“Low and slow” to protect its borders.) Buy Canadian! LOL
They can fly one of these:
How many people remember that the C-102 was the first jetliner to fly in the U.S.?
Bye Bye USA – If we can’t share than Canadians will stop buying your CRAP – I say we start by stop heading south for anything and turning off the Hollywood tap.
We’ll ‘play’ with the other kids in the block instead.
(BIG Middle finger pointed south)
With the recent US traffic on Canadian timber, the timing of this Boeing accusation is somewhat suspect.
Depending on what happens, it might be time for Canada to think about canceling their 18 plane Boing Super Hornet order and take their business to Europe instead.
… or better, to stop buying all Boeing products, only Airbus will be super fine. Now about Americans cars built in Canada, etc…
Astute observers of this genre are, no doubt, familiar with this December 2003 SeattlePost Intelligencer reader’s letter re 787 production:
Friday, December 26, 2003
Letters to the Editor – Let Gov. Locke check the math
Will Gov. Gary Locke please check my math? Let’s run a few numbers. It took $3.2 billion in tax breaks for The Boeing Co. to select Everett as the site for final assembly of the 7E7. But how many Boeing jobs will this generate? I was surprised to learn, according to your Dec. 16 front-page article, that the work on the 7E7 is expected to require only 800 to 1,200 final-assembly positions at the Everett plant. Let’s split the difference and say that it’s 1,000 workers. Let’s assume that they are well paid; say, on average, $100,000 per year ($100,000 times 1,000 workers is $100 million). Wow, still $3.1 billion in tax breaks to account for. According to the Dec. 23 P-I, the $3.2 billion in tax breaks would extend over 20 years. (The useful life of the 7E7 before being replaced by a newer generation of airplane?). Ignoring the effect of inflation for the moment, $100 million per year times 20 years is $2 billion. Wow, still $1.2 billion left. Thursday’s P-I informs us that there will be another $24 million “plan” to “help train the next generation of Boeing workers.”
The taxpayers of Washington, in effect, are going to be paying the salaries of 7E7 workers for the next 20 years, plus another billion or so (depending on the inflation rate) in tax breaks? Plus $24 million to train Boeing workers? This is adding up to some real money. I wonder if Boeing still complains that Airbus has an unfair competitive advantage because of government subsidies from France and England. Where’s the federal government to help out? And all this is being done for a company whose headquarters is in Chicago?
What is especially annoying is that I keep reading in the paper that we need to make Washington a “friendly place” for business. How about making it a friendly place for the men, women and children who live here?
with the 777X, the tax break is $8.7 billions https://www.bloomberg.com/news/articles/2016-11-28/boeing-received-illegal-tax-subsidy-for-777x-wto-panel-finds
First they ignore you,
then they laugh at you,
then they fight you,
then you win.
The real issue with this kind of ‘accuse by press’ nonsense presently under way is that it hides fact under a blizzard of propaganda. Specifically with reference to the three issues where the US is facing (or posturing depending on your point of view) the facts are hidden:
1: On the skim milk issue the US is totally in the right – the Canadian board unilaterally (and without consulting the government) imposed high import charges on US skim milk solely because Canadian producers had a short term excess. Problem is of course that skim milk is not under NAFTA while the US has a 500 million $US surplus with Canada on dairy products.
2: On softwood lumber the whole problem is that the US producers get their trees from private landowners (who charge for the right of course) while Canadian ones do from the state who charge stumpage fees (basically the cost to the state of planting a replacement tree and pacifying the anti-forestry and native contingents). Once every ten years the US softwood industry launches this charge, resulting in a 2-3% increase in the cost of US housing (and more money for the Canadian government!)
3: Boeing versus Bombardier: Lots of points already made – only one to add is that the Canadian government has refused to give money to Bombardier (its horrific ownership system being the issue), only a repayable loan for short-term research. Please do not tell Trump but Pratt and Whitney Canada gets far more aid from Canada!
Apologies for non-aviation data – it just shows that facts vanish under posturing. And of course very soon we will get in on the act when the ‘Buy American’ rules are sent to the WTO for adjudication (but not of course our ‘Buy Canadian’ policy which is of course pure and innocent).
Thats not true that Canadian government has refused to give money to Bomabardier, all thats happened is they have refused to make public what they have been given in a long time secret ‘Aerospace Champions’ fund
Pratt & Whitney Canada is included in their ongoing funding
“Pratt & Whitney Canada is included in their ongoing funding.”
That is not true and I have explained that situation to you before. When PWC discovered they were losing money to royalties they owed the government they elected to refund the government immediately and pulled out on this R&D programme. In other words the government was making money on the back of PWC because most of their products were very successful and royalties had to be paid on each engine sold.
You are talking about only one of Canadas state aid funds, there are many as described further down
Pathetic. If BA is really this scared of the C Series, they should have just bought BBD. It certainly wouldn’t have been expensive — probably even less than one of their crappy MAX/X derivative programs.
Couldn’t buy it; the planes don’t have control yokes.
You said it all !
Because of the Canadian law it was impossible.
Boeing tried and lost!
Does anyone think it’s a coincidence that it was Delta leading the charge to kill off Eximbank because low-interest loans were subsidizing aircraft purchases for foreign Delta competitors?
As it happens, I do think there’s a difference between the situations. It’s pretty normal for launch orders to get very low, perhaps even below-market pricing. And Boeing has arguably engaged in this itself (e.g. the Ryanair 737 orders in the wake of 9/11). But still, this is kind of a “F*** ME? NO, F*** YOU!” kinda move. Delta messed with Boeing, Boeing is messing with Delta. What goes around comes around.
Regarding Boeing possibly buying part of bbd, that never was considered. Boeing is seeking low cost manufacturing and lower labor problems long term and with future programs. Bombardier didn’t fit at all.
“Boeing is seeking low cost manufacturing and lower labor problems long term and with future programs. Bombardier didn’t fit at all.”
What you say is completely ridiculous and only shows that you know very little about Bombardier, the C Series and Canada.
First, there are no labour problems to speak of at Bombardier. And it’s been like that for a very long time now. This may be related to the fact that the President of Bombardier Aerospace from 2004 to 2008, and CEO of Bombardier from 2008 to 2015, held a master’s degree in labour relations.
As for the cost of manufacturing you need to know that the manufacturing and assembly of the C Series is a highly automated process that requires half as many people as the CRJ does despite the fact that the latter is about half the size of the C Series. And Bombardier had a state-of-the-art composite wing factory in Belfast a few years before Boeing had such a facility. And Bombardier has for a long time now been manufacturing labour-intensive aircraft parts in China, Mexico and Morocco. And what is done in-house is performed by robots where possible.
The Bombardier employees are also paid less than their counterparts in the US. And in addition to this the Canadian dollar is undervalued by more than 30% compared to the US dollar. As I write this the ratio is 1:1.37 in favour of the USD.
You may also ignore the fact that Boeing owned de Havilland Canada in the 80s. They have sunk large sums of money into DHC and had been bleeding cash like crazy until one day they decided to walk away and gave the company, literally, to the Ontario government.
A couple of years later Bombardier Aerospace acquired DHC from the Ontario government and were able to make that factory prosperous again by integrating it into BA. Today the Q400 and Global 7000 are assembled there and the manufacturing process is refined on a continuous basis, especially for new products like the Global. As for the Q400 Bombardier are so cost-conscious that they have been contemplating to move the assembly line to Russia. But the invasion of Ukraine in 2014 put this project on hold.
You were right though to say that Bombardier didn’t fit at all. But certainly not for the reasons you have mentioned.
Obviously you are not acquainted with the rather bolshy citizens of northern Ireland.
“Please do not tell Trump but Pratt and Whitney Canada gets far more aid from Canada!”
That is no longer the case. Because of the royalties they owed to the government PWC realized they were losing money on this programme and elected to refund the government in order to regain their financial independence.
Thats because they want to move jobs out of high cost locations to off shore ones – and get more state aid to boot from those places , like Mexico
But its more complicated than just ‘royalties’, as thats
just the SADI program, where money is repayable.
Theres an alphabet soup of other agencies and programs eg EDC , SDI, TPC, DIPP.
For obvious reasons Canada keeps these transactions
So I dont see P&WC having repaid all its state aid as you suggest
Please, gimme facts, not what you see in your soup….
The book was :
Canada at the WTO: Trade Litigation and the Future of Public Policy
EDC – Export Development Canada
SDI ( in french) Industrial development Corporation of Quebec
TPC- Technology Partnerships Canada
DIPC -Defence Industry productivity program
The real reason why the ‘royalty based subsidy’s were wound down was the WTO ruled them to be illegal state aid. Nothings really changed as the repayments ( not always required) are now based on overall company health.
So much for P&WC good heart.
Aerospace isnt the only business line subsidised, it includes General Motors Canada etc
There are no innocents in this arena. When Embraer became a threat in the regional jet segment, the Canadian government filed a complaint with the WTO, which forced Brazil to change its financing policy. On the other hand, in a subsequent complaint, the WTO declared illegality in Canadian incentive programs.
The same Delta that bought planes supposedly below cost was quite emphatic in claiming local government aid to airlines of the Middle East.
As the buyer (Delta) is American and the US is such an important market there will be an additional difficulty for Bombardier, since the US government can provide a much faster and more effective response than the WTO could.
so, by that logic, the entire 787 program is “dumping”.
$30 billion worth.
Being a technical person who claims no expertise in any type of law, but who is inclined to want to know the definition of something that I am reading a debate about, I decided to look up the definition of “dumping”. I found the following in Wikipedia, admittedly not authoritative, but definitely cheaper and faster than going to law school and just about all that is possible for me to do without exceeding my attention span (maybe 5 minutes) for study of legal issues.
“A standard technical definition of dumping is the act of charging a lower price for the like goods in a foreign market than one charges for the same good in a domestic market for consumption in the home market of the exporter.”
” The legal definitions are more precise, but broadly speaking, the WTO agreement allows governments to act against dumping where there is genuine (“material”) injury to the competing domestic industry. To do so, the government has to show that dumping is taking place, calculate the extent of dumping (how much lower the export price is compared to the exporter’s home market price), and show that the dumping is causing injury or threatening to cause injury.”
If the above is a correct definition of dumping, then is it not the case Boeing can demonstrate that dumping has occurred by simply demonstrating that Bombardier charged Delta a lower price for the C-Series than they charged to Air Canada, independent of whether that price is, or is not, below the per unit production cost for the C-Series?
After my five minute legal education, the following passage from the Boeing statement quoted in Mr. Leeham’s post takes on new and much greater significance.
“Notably, it is selling the aircraft into the United States at prices that are millions lower than those charged in Canada – the very definition of dumping.”
If the above Wikipedia definition of dumping were fully complete, which stuff that I was starting to read before my 5 minute attention span for legal issues ran out suggests it might not be, then if Boeing sold 787’s equally below cost in all countries, it would not be guilty of dumping; however, if it could be demonstrated that it sold them at lower prices in country X than it charged in the United States, then it would be guilty of dumping in country X.
If there are any actual lawyers out there, do you agree or disagree that according to the technical legal definition of dumping, not to be confused with what each of us feels may or may not be fair, Boeing has an open and shut case if it has proof that Delta was sold C-Series airplanes for substantially less than Air Canada paid?
Does anyone think that the price of 19.6 milliom per plane that the complaint claims Delta obtained, realistically reflects the per unit cost of production for the C-Series? Is it even within 10 million dollars of the true cost of production?
Well it is certainly true that Boeing sold 737’s to United at a lower price than they had previously sold 737’s to Air Canada. And it is certainly true that it sold the first 200 plus 787-8’s at a lower price that it sold the same airframes to those who did not sign up for the first 200 or whatever was the cut-off number for initial low cost sales. So was Boeing dumping?
Regarding selling 737’s cheaper to United than Air Canada: The dumping definitions that I found in my 5 minutes of legal study said selling a product in other countries cheaper than it is sold in the home country was one form of dumping. Since United is a U.S. carrier and Boeing’s home country is the U.S., these dumping definition’s say that Boeing cannot sell 737’s to Air Canada or other foreign carriers cheaper than they generally sell them to United or other US customers, but they do not prohibit Boeing from charging Air Canada or any other non-US carriers more than they charge US customers.
Re the 787: My highly non-expert opinion is that as long as Boeing does offered the same too low prices to similar customers in all countries at a particular point in time, then they did not run afoul of restrictions to not sell cheaper than what they charge in their home country. Whether they ran afoul of restrictions against selling below production cost is a question for real lawyers. I suspect that Boeing might argue that they use program accounting and are charging prices, at any point in time, that they estimate will pay for the cost of the program over the life of the program. I have no idea how real lawyers would deal with a product allegedly accidentally sold below cost due to gross underestimation of production costs, whose price is increased once the manufacturer becomes aware of the higher production costs.
Bingo, I was thinking exactly the same thing. Programme accounting, 4000 airframes, problem sorted.
No one can break into the large airliner market without the help of a government and that includes Boeing and Airbus.
Both the Air Canada and Delta orders were done at prices that resulted in them taking an unfavourable contract charge – in other words both airlines got a great deal. Given that one ordered CS300 and the other CS100, and delta’s order was bigger (so perhaps entitled to better pricing) it will probably be hard to show that BBD “dumped” significantly below what it sold in its home market.
I just invested another 5 minutes in my legal education and noticed the following in the Wikipedia article on Dumping (Price Policy).
“If a company exports a product at a price that is lower than the price it normally charges in its own home market, or sells at a price that does not meet its full cost of production, it is said to be “dumping” the product.”
My previous statement that Boeing could sell 787’s below cost in all countries and not be guilty of dumping would appear to be not true based on this additional information that I have gleaned in my latest 5 minutes of legal education; however, according to my understanding of the above Wikipedia quote, and the two that I cited in my previous post, it would still be the case that a company selling a product outside its home country at a price below that which it normally charges in its home country would, according to these quotes, be guilty of dumping in the non home country, even if the prices charged in the non home country are not below production costs. If this is true, then it would still be the case that all Boeing would need to do to prove it’s case would be to prove that Delta was charged substantially less per plane for the C-Series than Air Canada was.
It is not so easy because Air Canada ordered 45 of the bigger CS300 and Delta ordered 75 CS100. Even Airbus and Boeing charge more for bigger aircraft.
The whole problem is about “normally”. There is no such thing for a new aircraft trying to enter the market. Airbus did enter US market a while ago with renting several A300 to Eastern Air Lines for about nothing. Boeing, McDonnell Douglas and Lockheed smiled about the new parvenu. Boeing will not make such an error again.
Delta ordered 75 CS100 out of total 118 orders for CS100. Due to statistics Delta did get the “normal” price.
That $30 bill was development costs, not production costs.
$60b then : 30 devel, 30 deferred cost bow wave 🙂
Dumping is more linked to comodity products.
( afair dumping charges were brought up on Chinese
solar panels and bycicles.
Airplanes aren’t really a commodity available from various producers. Pricing invariably is negotiated.
Earlier the US set up protective taxation on steel products from Europe and Asia to help their completely uncompetitive smelting industry. ( India came into that market much later.)
US has a long history of preaching water and drinking wine in this domain. But bullying works … for now.
My 5 minute crash course on the subject tells me :
There is no case at all because Boeing doesn’t offer a product similar to the Cseries. So there is no “material injury to the competing domestic industry”.
Yes they do.
The 737-600/700 are similar to the CS100/300.
60ties product and design vs. leading edge.
( 787 was offered with much list pricing with the explanation that production would “cost nothing, really”. )
Same as with other uncompetitive US industries that need “protection”.
offered with much lower list pricing on an expla ..
The 737 is not a sixties product. Like George Washingtons axe, very little of the original remains, also known as Theseus’s paradox.
The engines are onto their 3rd design, the wing is all new, only the top half of the tail is original. The undercarriage has been lengthened, the fuselage lengthened and beefed up. The cockpit all new ( eventually)
Still the basic design reflects the manufacturing methods of days gone by. ( and the wing structure obviously isn’t a brand new design either. Reprofiled to a marginal supercritical profile, strengthened, extended … )
My very, very, highly non-expert opinion would be that if the following quote from Mr; Leeham’s post, which states that the 737-700 competed against the C-Series in two bid competitions at US carriers, and won one of them, is essentially correct, then there isn’t much hope of successfully arguing that the 737-700 and C-Series are not competing products.
“Boeing competed in the Delta competition, offering a combination of used Boeing 717s and, LNC believes, new 737-700s. The fully amortized -700s can be offered at a very low price, compared with the new 737-7 MAX (which at that time was the 125-seat, two-class version, not the 149-seat configuration it has since become). Boeing beat Bombardier in a hot contest at United Airlines, predating the Delta deal, by offering the -700 at a rock-bottom price believed to be in the $24m range, a price Bombardier could not then match.”
Let us not forget that Boeing and United have a long and, er, honorable history in doing business together – and with each other… Anyone know why they parted company all those years ago?
too honorable, too close.
case of split personality that carried over
into the flesh so to speak 🙂
( Interesting to note that Junkers airlines too were split off from their manufacturing mother, though for rather different reasons.)
anti-trust forced the split between Boeing, United and Pratt & Whitney.
Quite. I now look forward to hearing plans to bring all Boeing products under the Made in America, er, umbrella…
http://www.npr.org/2017/02/28/517565701/trumps-america-first-agenda-marks-sharp-break-in-u-s-economic-policy: “…The biggest disconnect between Trump’s narrow brand of nationalism and the reality of global supply chains showed up when the president visited a Boeing plant earlier this month to celebrate the rollout of a new 787 Dreamliner.
“This plane, as you know, was built right here in the great state of South Carolina,” Trump said. “Our goal as a nation must be to rely less on imports and more on products made here in the U.S.A.”
While Boeing is an American company, the Dreamliner is a melting pot. Its fuselage comes from Italy. The wings are from Japan. Passenger doors are built in France… “
How many times did the US invade Canada (6, 12?)
Braddock aside how many times did it go the other way?
The US did invade Canada. See this: https://www.youtube.com/watch?v=7L50TyW9a8k
Twice. During revolutionary War and again in War of 1812.
The first invasion of Quebec was to persuade the french colonists to join the 13 colonies.
Quebec at the time covered the lower parts of Ontario and even around the Great lakes and down to the junction of Ohio and Mississippi rivers.
As Trump will learn the hard way, wars can go badly, as the British asked their allies for troops, while the Russians declined !, Hessian states and Brunswick agreed.
Deploy the Omega Force! 😉
The quotes below are from the World Trade Organization website at the following link.
“If a company exports a product at a price lower than the price it normally charges on its own home market, it is said to be “dumping” the product.”
Note that the above definition says nothing about whether the domestic or export prices are below production costs.
“There are many different ways of calculating whether a particular product is being dumped heavily or only lightly. The agreement narrows down the range of possible options. It provides three methods to calculate a product’s “normal value”. The main one is based on the price in the exporter’s domestic market. When this cannot be used, two alternatives are available — the price charged by the exporter in another country, or a calculation based on the combination of the exporter’s production costs, other expenses and normal profit margins. And the agreement also specifies how a fair comparison can be made between the export price and what would be a normal price.”
So production costs are only relevant if there is not adequate information about the price in the exporter’s domestic market, in which case they are used only to calculate what a normal price in the domestic market would be?
It appears that much of the Wikipedia page on dumping that I quoted in earlier posts was copied verbatim from the WTO website.
787 Development costs? They are still loosing as the number keeps getting bigger. The cost of production was higher than expected why do you think they are trying not to sell anymore 787-8s.
Remember the US and Canada have different accounting rules . While Boeing can hide this in their ‘development costs’ Bombardier regardless of the reason has to declare it.. Canada has much more transparent accounting rules.
I am waiting for Bombardier’s counter suit for billions…. some type of suit that claims Boeing’s lawsuit cost sales and reputation.
Should be interesting. I hope BBD makes it thru as the product looks interesting and cannot wait to fly Delta on those ‘dumped’ airframes.
The dumping law for me never made much sens to me. Bacially dumping is selling to another country BELLOW the price you sell in your own country. So for to exemple if Boeing sell to united 737-700 for $1 dollar each plane then sell to air canada those same planes for $2 dollar.Bombardier coudn’t sue Boeing for Dumping !?!?! It crazy ! Those law need to be revised to tske into account how much it cost to build thoses planes.
That’s fine, Canada should just cancel the super hornet buy.