Essay on Bombardier Canada Versus Brazil at the Wto

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Bombardier Canada versus Brazil at the WTO 9-703-022 1.Analysis of the aero industry Aircraft industry is deeply related to the government sector. As case says, both companies Bombardier and Embraer S.A, were the originally in government sector. Since this industry generally have a historical relationship with the military, each state has tendency to protect it. Also there is another reason that aircraft industry has huge impact in local economics in the point of the expenditure, employee and cooperate tax. Commercially aircraft industry create the business hierarchy under the assemble manufacturer, since aircraft consist of so many parts require high tech solution. Therefore not only manufacturers, but also R&D engineering …show more content…
Therefore, 2 companies clearly identified in the hostile competition. If other competitor 2-3 firms would participate this industry, 2 companies along with 2 countries might not be dispute. They are targeting dominant strategy that they try to commoditize their product as industrial standard to occupy major share to let the other quit or squeeze its market. Especially this industry is still expanding along with the demand of regional jet at smaller or medium size airports and in shorter flight. If the company continue its effort to minimize the cost even with the government subsidiary, the clients would be happy and the companies have more competition. Incentive for consecutive company restructuring. As above mentioned, key issue is how to continue company’s consecutive trial for restructuring and operation cost reduction. Those kinds of incentives such as subsidization, export tax exemption, export finance might cause the recession of such effort. In this sense democracy may function to enhance the effort by providing opposition. As additional point, I think support to R&D and exemption or reduction of cooperate tax is more effective than export finance is to avoid dispute. Recommendation to Bombardier. Considering bilateral dispute, I recommend Bombardier to work to Canadian government to step the negotiation out of WTO to reach mutual agreement. WTO ruling is now meaningless and without bilateral