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Boeing dispute derails sale of Super Hornet fighters to Canada

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The move underlines Ottawa's anger at a decision by Boeing to launch a trade challenge against Canadian planemaker Bombardier Inc (BBDb.TO), which the USA giant accuses of dumping airliners on the American market.

Canada is scrapping a plan to buy 18 Boeing Co (BA.N) Super Hornet fighter jets amid a deepening dispute with the USA aerospace company, three sources familiar with the matter said on Tuesday.

The Super Hornets were supposed to help tide Canada over as it holds a competition for fighters to replace 77 veteran CF-18s.

According to the sources, next week Ottawa will announce it intends to acquire a used fleet of older Australian F-18 jets.

If Canada actually decides to buy used Hornets from Australia, they will also have to invest in maintaining the aging planes. It would be a deeply unfortunate outcome.

In addition, industry sources said it remains an open question whether Ottawa will be saving money by buying second-hand Australian jets that are almost as old as Canada's CF-18s.

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Investors Business Daily notes that the move appears to be motivated by a 300 percent tariff Washington slapped on sales of Canadian Bombardier Series C jets.

Canada's decision to shun Boeing Co jets could open the way for European rivals seeking to supply new fighters, assuming the government can sort out major procurement challenges, three sources familiar with the matter said on Wednesday.

The final ruling in the case is expected next year, but the relationship between Boeing and Canada has nosedived since. Prime Minister Justin Trudeau said at the time the country would not engage in business with Boeing till such time its dispute with Bombardier continued, a sentiment he repeated to President Donald Trump in October.

At a conference in Boston in November, Bombardier CEO Alain Bellemare said: "Boeing is underestimating what they are tackling". "Unfortunately, I think they're taking advantage of a [political] context that's favourable to them".

News of the development comes as Mr. Trump once again has taken the occasion to complain about trade deficits with the U.S.'s neighbors. It has been the standard line in Ottawa for months that Boeing, having failed to act as a trusted or valued partner, has effectively been shut out of any new federal contracts.

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