Bombardier Canada Versus Brazil at the Wto

Topics: Sovereign state, Subsidy, Government Pages: 3 (925 words) Published: May 2, 2010
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 companies, consulting firm and design venders, who play a significant role to support it and the government must encourage its industry. On the contrary in the military point of view, new company establishment in that industry often causes regional frictions. Of course long-term investment such as R&D and periodical gap between industrialization and commercialization in this industry also request a government long-term support. On the other hand, negative factor to subsidize that kind of firm by government is democratic opposition by the media or citizens in that country. Those consensus well works as brake in most cases, while democratic opened countries can not control it and pay attention to it compare with the countries such as Singapore and China. This is one of the obvious cases that political form affects the business. Beyond the control of private firm Like aerospace industry, aircraft industry often requires a performance beyond the control of a private firm from not only the economic scale point of view, but political point of view. If the competitor adopts the government collaboration in its sales promotion, the private firm can not keep its dominancy without the similar collaboration with the government. So as the...
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