Why Do You Think Bombardier And Embraer Are Guilty As Charged

When Do Government tax Azita Shafai Incentives become export subsidies Case Study TDMT 1353

1. Do you think Bombardier and Embraer are guilty as charged? Please explain your answer.

In my opinion I think Bombardier and Embraer are guilty as charged because both accuse each other of what they are individually guilty of. In that they both had government help in manufacturing aircraft whether it was a low interest federal loan or a subsidy, they are both guilty of breaching WTO subsidy practices. Although to their credit as smart businesses, subsidies are an important form of government intervention for aircraft manufacturers to meet deadlines. Unjustly though taxpayers
However, the help they are receiving and the competitive edge that is making them capable to meet deadlines for dates is internal from government help in subsidy’s or low interest rate loans. The matter of government intervention in helping some of it’s own companies is a given. But in the case of Bombardier moving it’s C-series jet final production stage to the States leaves a stark reminder to the government that businesses will leave if the boat is sinking or if the Loonie is dropping. In my opinion I believe if you are a member of such an organization such as the WTO, you should follow the practices and regulations to set a social norm for other countries with competing companies. But in the case of business, anyone will jump on the first opportunity to gain an edge. The trading system has been so structured, and its rules so lopsided that without major change to correct the imbalances and inequities and inbuilt asymmetry in the rules, developing countries can never hope to industrialize and compete with highly industrialized nations. According to failings of the WTO (n.d.). In my opinion I think such matters are internal but also external, the WTO has trade imbalances that do not allow countries such as Brazil a fighting chance. So to continue in competing with Bombardier, Embraer should be allowed subsidy’s of which Bombardier is also receiving.
As mentioned in the previous question, this could be a problem if an export industrialized company seeks to move final production elsewhere. The two main arguments are political and economic. Politically intending to protect the interest of certain groups often at the expense of others. Economically intending to boost overall wealth for the respective nation and standard of living. The most common political argument is to protect jobs, which often ends up having the reverse effect as it hurts consumers and is self-defeating. As mentioned in Question 1, subsidy’s are a forceful gamble for taxpayers who are unaware they are gambling on the success of a certain export industry. The most common problem associated with governments protecting domestic industries is that at times they can be inefficient industries that require a large bailout. Liquidation of GM and Chrysler would have cut 2.63 million jobs from the U.S. economy in 2009, according to a study by the Center for Automotive. U.S. said it lost about $10.5 billion on its investment of $49.5 billion. According to GM Bailout Ends as U.S. Sells Last of ‘Government Motors’. Which might be to the same effect for either the Canadian government or the Brazilian government if they continue to subsidize export industries. After all the government support I believe businesses may have more