Brazil, Canada struggle to end aircraft dispute
Brazil and Canada vowed on Wednesday to end years of bitter disputes over aviation industry subsidies but struggled to reach an accord to prevent future battles between their rival aircraft makers Embraer and Bombardier Inc..
In the first visit to Brazil by a Canadian prime minister in six years, Paul Martin said aviation and meat disputes that prompted Brazilians to pour Canadian whiskey down drains and herd cows in front of Canada's embassy a few years ago were hopefully a thing of the past.
"We have succeeded in our objective of reinvigorating and relaunching very important relations," Martin told journalists after meeting Brazilian President Luiz Inacio Lula da Silva.
Canada and Brazil, two of the Americas' three largest nations by land area, said they agreed not to retaliate against each other over past aviation industry disputes. They said they would keep talking about means to prevent future ones.
Both Brazil's Embraer and Montreal-based Bombardier have won rulings against each other before the World Trade Organization."This visit today is an opportunity to resume dialogue," Lula said.
Brazilian Trade Minister Luiz Fernando Furlan was unable to put a time frame on when the governments might reach an accord to prevent further "market-distorting" government aid to their aircraft makers."It's all about establishing a few basic rules for the future," Furlan told reporters.
Brazil is eager to put disputes behind it and raise sales of value-added goods to boost exports. Canada wants to close a trade deficit with Brazil, a country that still represents less than half a percent of what Canada buys and sells.
A new dispute is brewing as Bombardier, the world's third-largest aircraft maker, seeks $700 million in government loans to bankroll its new C-Series jet, which seats 115 to 135 passengers.
Embraer is developing a similar, rival jet but Furlan said the company had obtained $1 billion in private funding to develop its aircraft.
(From Reuters, November 24, 2004)
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