The European Commission has given the UK its backing in a bitter trade dispute with Washington, hitting out at US moves to levy punitive tariffs on aerospace group Bombardier, which employs thousands in Belfast.
Brussels has given the warning it will fight the case to US authorities, which are considering imposing duties of 300 per cent on Bombardier’s C Series jets that American rival Boeing insists receives improper government subsidies. The possible measures have caused uproar in the UK, where the Canadian aircraft maker has a plant that is critical to Northern Ireland’s economy.
An EU official said Brussels had intervened in the case to defend both the Belfast plant and aerospace suppliers across Europe that stood to be affected by the US crackdown.
“The commission considers that there is no legal basis to impose definitive duties,” the official said.
The issue is also extremely sensitive for UK prime minister Theresa May’s fragile alliance with the Northern Irish DUP party, on whom she depends to prop up her minority government.
Brussels’ move comes despite the UK’s impending exit from the EU and makes clear that the commission sees the potential duties, announced in September, as an unjustified action against the bloc. The stance would pave the way for the EU to take action at the World Trade Organisation if the US presses ahead.
The EU support is an awkward blessing for Britain, demonstrating the potential benefits of being a member of a large trading bloc just as negotiations on Brexit reach a particularly difficult phase.
Speaking to the Financial Times last month, Cecilia Malmström, the EU trade commissioner, said the proposed tariffs seemed “disproportionate” and that “we will try to help our British friends as much as we can”.
She said: “They are members until the very day they leave, so, of course, there is absolutely no discrimination or distinction here.”
Liam Fox, the UK trade minister who has accused the US of “protectionism”, raised the issue with Ms Malmström in September, according to people briefed on the discussions.
The case centres on complaints from Boeing that Bombardier benefited from illegal subsidies in the UK and Canada to develop the C Series aircraft, whose development costs ran to more than $5bn, double the initial budget. The US Department of Commerce has backed the Chicago-based aircraft maker’s claims.
Last month Airbus, Boeing’s European rival, bought a majority stake in the C series and plans to sidestep any duties by producing aircraft to be sold in the US at a plant in Alabama.
A final decision on the duties is expected next year.
The EU source said Brussels had been providing support to the UK “throughout the US investigation and today formally submitted its arguments to the US authorities”.
Brussels “will continue to defend the interests of the EU industry with the aim of ensuring that the US investigation is fully in line with WTO rules”, the source said.
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