

Currently released so far... 12478 / 251,287
Browse latest releases
2010/12/01
2010/12/02
2010/12/03
2010/12/04
2010/12/05
2010/12/06
2010/12/07
2010/12/08
2010/12/09
2010/12/10
2010/12/11
2010/12/12
2010/12/13
2010/12/14
2010/12/15
2010/12/16
2010/12/17
2010/12/18
2010/12/19
2010/12/20
2010/12/21
2010/12/22
2010/12/23
2010/12/24
2010/12/25
2010/12/26
2010/12/27
2010/12/28
2010/12/29
2010/12/30
2011/01/01
2011/01/02
2011/01/04
2011/01/05
2011/01/07
2011/01/09
2011/01/10
2011/01/11
2011/01/12
2011/01/13
2011/01/14
2011/01/15
2011/01/16
2011/01/17
2011/01/18
2011/01/19
2011/01/20
2011/01/21
2011/01/22
2011/01/23
2011/01/24
2011/01/25
2011/01/26
2011/01/27
2011/01/28
2011/01/29
2011/01/30
2011/01/31
2011/02/01
2011/02/02
2011/02/03
2011/02/04
2011/02/05
2011/02/06
2011/02/07
2011/02/08
2011/02/09
2011/02/10
2011/02/11
2011/02/12
2011/02/13
2011/02/14
2011/02/15
2011/02/16
2011/02/17
2011/02/18
2011/02/19
2011/02/20
2011/02/21
2011/02/22
2011/02/23
2011/02/24
2011/02/25
2011/02/26
2011/02/27
2011/02/28
2011/03/01
2011/03/02
2011/03/03
2011/03/04
2011/03/05
2011/03/06
2011/03/07
2011/03/08
2011/03/09
2011/03/10
2011/03/11
2011/03/13
2011/03/14
2011/03/15
2011/03/16
2011/03/17
2011/03/18
2011/03/19
2011/03/20
2011/03/21
2011/03/22
2011/03/23
2011/03/24
2011/03/25
2011/03/26
2011/03/27
2011/03/28
2011/03/29
2011/03/30
2011/03/31
2011/04/01
2011/04/02
2011/04/03
2011/04/04
2011/04/05
2011/04/06
2011/04/07
2011/04/08
2011/04/09
2011/04/10
2011/04/11
2011/04/12
2011/04/13
2011/04/14
2011/04/15
2011/04/16
2011/04/17
2011/04/18
2011/04/19
2011/04/20
2011/04/21
2011/04/22
2011/04/23
2011/04/24
2011/04/25
2011/04/26
2011/04/27
2011/04/28
2011/04/29
2011/04/30
Browse by creation date
Browse by origin
Embassy Athens
Embassy Asuncion
Embassy Astana
Embassy Asmara
Embassy Ashgabat
Embassy Apia
Embassy Ankara
Embassy Amman
Embassy Algiers
Embassy Addis Ababa
Embassy Accra
Embassy Abuja
Embassy Abu Dhabi
Embassy Abidjan
Consulate Auckland
Consulate Amsterdam
Consulate Adana
American Institute Taiwan, Taipei
Embassy Bujumbura
Embassy Buenos Aires
Embassy Budapest
Embassy Bucharest
Embassy Brussels
Embassy Bridgetown
Embassy Bratislava
Embassy Brasilia
Embassy Bogota
Embassy Bishkek
Embassy Bern
Embassy Berlin
Embassy Belmopan
Embassy Belgrade
Embassy Beirut
Embassy Beijing
Embassy Banjul
Embassy Bangkok
Embassy Bandar Seri Begawan
Embassy Bamako
Embassy Baku
Embassy Baghdad
Consulate Barcelona
Embassy Copenhagen
Embassy Conakry
Embassy Colombo
Embassy Chisinau
Embassy Caracas
Embassy Canberra
Embassy Cairo
Consulate Curacao
Consulate Ciudad Juarez
Consulate Chennai
Consulate Casablanca
Consulate Cape Town
Consulate Calgary
Embassy Dushanbe
Embassy Dublin
Embassy Doha
Embassy Djibouti
Embassy Dili
Embassy Dhaka
Embassy Dar Es Salaam
Embassy Damascus
Embassy Dakar
Consulate Dubai
Embassy Helsinki
Embassy Harare
Embassy Hanoi
Consulate Ho Chi Minh City
Consulate Hermosillo
Consulate Hamilton
Consulate Hamburg
Consulate Halifax
Embassy Kyiv
Embassy Kuwait
Embassy Kuala Lumpur
Embassy Kinshasa
Embassy Kingston
Embassy Kigali
Embassy Khartoum
Embassy Kathmandu
Embassy Kampala
Embassy Kabul
Consulate Kolkata
Embassy Luxembourg
Embassy Luanda
Embassy London
Embassy Ljubljana
Embassy Lisbon
Embassy Lima
Embassy Lilongwe
Embassy La Paz
Consulate Lahore
Consulate Lagos
Mission USOSCE
Mission USNATO
Mission UNESCO
Embassy Muscat
Embassy Moscow
Embassy Montevideo
Embassy Monrovia
Embassy Minsk
Embassy Mexico
Embassy Mbabane
Embassy Maputo
Embassy Manila
Embassy Manama
Embassy Managua
Embassy Malabo
Embassy Madrid
Consulate Munich
Consulate Mumbai
Consulate Montreal
Consulate Monterrey
Consulate Milan
Consulate Melbourne
Embassy Nicosia
Embassy Niamey
Embassy New Delhi
Embassy Ndjamena
Embassy Nassau
Embassy Nairobi
Consulate Naples
Consulate Naha
Embassy Pristina
Embassy Pretoria
Embassy Prague
Embassy Port Of Spain
Embassy Port Louis
Embassy Port Au Prince
Embassy Phnom Penh
Embassy Paris
Embassy Paramaribo
Embassy Panama
Consulate Peshawar
REO Basrah
Embassy Rome
Embassy Riyadh
Embassy Riga
Embassy Reykjavik
Embassy Rangoon
Embassy Rabat
Consulate Rio De Janeiro
Consulate Recife
Secretary of State
Embassy Suva
Embassy Stockholm
Embassy Sofia
Embassy Skopje
Embassy Singapore
Embassy Seoul
Embassy Sarajevo
Embassy Santo Domingo
Embassy Santiago
Embassy Sanaa
Embassy San Salvador
Embassy San Jose
Consulate Strasbourg
Consulate St Petersburg
Consulate Shenyang
Consulate Shanghai
Consulate Sapporo
Consulate Sao Paulo
Embassy Tunis
Embassy Tripoli
Embassy Tokyo
Embassy The Hague
Embassy Tel Aviv
Embassy Tehran
Embassy Tegucigalpa
Embassy Tbilisi
Embassy Tashkent
Embassy Tallinn
Consulate Toronto
Consulate Tijuana
USUN New York
USEU Brussels
US Office Almaty
US Mission Geneva
US Interests Section Havana
US Delegation, Secretary
UNVIE
Embassy Ulaanbaatar
Embassy Vilnius
Embassy Vienna
Embassy Vatican
Embassy Valletta
Consulate Vladivostok
Consulate Vancouver
Browse by tag
AU
ASEC
AE
AF
AORC
AEMR
AMGT
ABUD
AFFAIRS
APER
AS
AMED
AY
AG
AR
AJ
AL
AID
AM
AODE
ABLD
AMG
AFIN
ATRN
AGAO
AFU
AN
AA
ALOW
APECO
ADM
ARF
ASEAN
APEC
AMBASSADOR
AO
ASUP
AZ
AADP
ACOA
ANET
AMCHAMS
ACABQ
ASECKFRDCVISKIRFPHUMSMIGEG
APCS
AGMT
AINF
AIT
AORL
ACS
AFSI
AFSN
ACBAQ
AFGHANISTAN
ADANA
ADPM
AX
ADCO
AECL
AMEX
ACAO
ASCH
AORG
AGR
AROC
ASIG
AND
ARM
AQ
ATFN
AC
AUC
ASEX
AER
AVERY
AGRICULTURE
BL
BR
BO
BA
BD
BM
BK
BG
BU
BB
BH
BTIO
BY
BEXP
BP
BE
BRUSSELS
BF
BIDEN
BT
BX
BC
BILAT
BN
BBSR
BTIU
BWC
BMGT
CA
CASC
CVIS
CM
CH
CO
CU
CD
CWC
CI
CS
CY
CMGT
CF
CG
CR
CB
CV
CW
CE
CBW
CT
CPAS
COUNTERTERRORISM
CJAN
CODEL
CIDA
CDG
CDC
CIA
CTR
CNARC
CSW
CN
CONS
CLINTON
COE
CROS
CARICOM
CONDOLEEZZA
COUNTER
CL
COM
CICTE
CIS
CFED
COUNTRY
CJUS
CBSA
CEUDA
CLMT
CAC
COPUOS
CIC
CBE
CHR
CTM
CVR
CITEL
CLEARANCE
CACS
CAN
CITT
CARSON
CACM
CDB
CAPC
CKGR
CBC
EC
EG
EPET
ECON
ETRD
EFIN
EIND
EMIN
ENRG
EAID
EAGR
EUN
ETTC
EAIR
ENIV
ES
EU
EINV
ELAB
ECIN
EFIS
ELTN
EWWT
ECPS
ECONOMIC
ENGR
EN
EINT
EPA
ELN
ESA
EZ
ER
ET
EFTA
EINVECONSENVCSJA
EUMEM
ETRA
EXTERNAL
EI
EUR
EK
ERNG
ENGY
ETRDEINVECINPGOVCS
ENERG
EINVEFIN
ENVR
ECA
ELECTIONS
ETC
EUREM
ENNP
EFINECONCS
EURN
ECINECONCS
EEPET
EXIM
ERD
ENVI
ETRC
ETRDEINVTINTCS
ETRO
EDU
ETRN
EAIG
ECONCS
ECONOMICS
EAP
ECONOMY
EINN
EIAR
EXBS
ECUN
EINDETRD
EREL
EUC
ESENV
ECONEFIN
ECIP
EFIM
EAIDS
ETRDECONWTOCS
EUNCH
EINVETC
IZ
IT
IR
IS
IN
IC
IAEA
IO
ICAO
IWC
ID
IV
ISRAEL
IAHRC
IQ
ICTR
IMF
IRS
IDP
IGAD
ICRC
ICTY
IMO
IL
INRA
INRO
ICJ
ITU
IBRD
INMARSAT
IIP
ITALY
IEFIN
IACI
ILO
INTELSAT
ILC
ITRA
IDA
INRB
IRC
INTERPOL
IA
IPR
IRAQI
ISRAELI
INTERNAL
ISLAMISTS
INDO
ITPHUM
ITPGOV
ITALIAN
IBET
INR
IEA
IZPREL
IRAJ
ITF
IF
KDEM
KU
KPAL
KNNP
KCRM
KZ
KN
KS
KJUS
KTFN
KSCA
KV
KISL
KPAO
KPKO
KIRF
KTIA
KIPR
KFLO
KFRD
KTIP
KAWC
KSUM
KCOM
KAID
KE
KTDB
KMDR
KOMC
KWBG
KDRG
KVPR
KTEX
KGIC
KWMN
KSCI
KCOR
KACT
KDDG
KHLS
KSAF
KFLU
KSEO
KMRS
KSPR
KOLY
KSEP
KVIR
KGHG
KIRC
KUNR
KIFR
KCIP
KMCA
KMPI
KBCT
KHSA
KICC
KIDE
KCRS
KMFO
KRVC
KRGY
KR
KAWK
KG
KFIN
KHIV
KBIO
KOCI
KBTR
KNEI
KPOA
KCFE
KPLS
KSTC
KHDP
KPRP
KCRCM
KLIG
KCFC
KTER
KREC
KTBT
KPRV
KSTH
KRIM
KRAD
KWAC
KWMM
KFRDCVISCMGTCASCKOCIASECPHUMSMIGEG
KOMS
KX
KMIG
KRCM
KVRP
KBTS
KPAONZ
KNUC
KNAR
KPWR
KNPP
KDEMAF
KNUP
KNNPMNUC
KERG
KGIT
KPAI
KTLA
KFSC
KCSY
KSAC
KTRD
KID
KOM
KMOC
KJUST
KGCC
KREL
KFRDKIRFCVISCMGTKOCIASECPHUMSMIGEG
KFTFN
KO
KNSD
KHUM
KSEC
KCMR
KCHG
KICA
KPIN
KESS
KDEV
KCGC
KWWMN
KPAK
KWNM
KWMNCS
KRFD
MOPS
MCAP
MPOS
MARR
MO
MNUC
MX
MASS
MG
MY
MU
ML
MR
MILITARY
MTCRE
MT
MEPP
MA
MDC
MP
MAR
MASSMNUC
MARAD
MAPP
MZ
MD
MI
MEETINGS
MK
MCC
MEPN
MRCRE
MAS
MIL
MASC
MC
MV
MTCR
MIK
MUCN
MEDIA
MERCOSUR
MW
MOPPS
MTS
MLS
MILI
MTRE
MEPI
MQADHAFI
MAPS
NO
NATO
NL
NP
NZ
NSF
NI
NH
NG
NAFTA
NU
NASA
NR
NATOPREL
NSSP
NSG
NA
NT
NW
NK
NPT
NPA
NATIONAL
NPG
NSFO
NS
NSC
NE
NGO
NDP
NIPP
NRR
NEW
NZUS
NC
NAR
NV
NORAD
OTRA
OPCW
OVIP
OAS
OREP
OPIC
OIIP
OPRC
ODIP
OEXC
OPDC
OSCE
OIC
OSCI
OECD
OFDP
OFDA
OMIG
OPAD
OFFICIALS
OVP
OIE
OHUM
OCS
OBSP
OTR
OSAC
ON
OCII
OES
PGOV
PREL
PHUM
PTER
PINS
PINR
PREF
PK
PROP
PA
PARM
PBTS
PMAR
PM
PGIV
PE
PRAM
PHUH
PHSA
PL
PNAT
PO
PLN
PAO
PSA
PHUMPGOV
PF
PEL
PBIO
POLITICS
PHUMBA
PAS
POL
PREO
PAHO
PMIL
POGOV
POV
PAK
PNR
PRL
PG
PREFA
PSI
PINL
PU
PARMS
PRGOV
PALESTINIAN
PAIGH
POLITICAL
PARTIES
POSTS
PROG
PORG
PTBS
PUNE
POLICY
PDOV
PCI
PGOVSMIGKCRMKWMNPHUMCVISKFRDCA
PBT
PP
PS
PY
PTERE
PGOF
PKFK
PSOE
PEPR
PPA
PINT
PRELP
PSEPC
PGOVE
PINF
PNG
PGOC
PFOR
PCUL
POLINT
PGGV
PHALANAGE
PARTY
PGOVLO
PHUS
PDEM
PECON
PROV
PHUMPREL
RS
RU
RELATIONS
RW
RO
RM
RP
ROOD
RICE
RUPREL
RSO
RCMP
REACTION
REPORT
REGION
RIGHTS
RF
RFE
RSP
RIGHTSPOLMIL
ROBERT
SU
SCUL
SNAR
SOCI
SF
SA
SHUM
SENV
SP
SR
SY
SANC
SC
SMIG
SZ
SARS
SW
SEVN
SO
SEN
SL
SNARCS
SNARN
SI
SG
SN
SH
SYR
SAARC
SPCE
SHI
SCRS
SENVKGHG
SYRIA
SWE
STEINBERG
SIPRS
ST
SNARIZ
SSA
SK
SPCVIS
SOFA
SIPDIS
SAN
TC
TI
TBIO
TH
TSPL
TRGY
TSPA
TPHY
TU
TW
TS
TAGS
TK
TX
TNGD
TZ
TF
TL
TV
TN
TD
TIP
TR
TP
TO
TT
TFIN
THPY
TERRORISM
TINT
TRSY
TURKEY
TBID
US
UK
UNGA
UP
UZ
UNMIK
USTR
UNO
UNSC
UN
UNESCO
UNAUS
UNHRC
UY
UG
UNHCR
UNCND
USOAS
USEU
UNICEF
UNEP
UV
UNPUOS
UNCSD
USUN
UNCHR
UNDC
USNC
UE
UNDP
UNC
USPS
USAID
UNVIE
UAE
UNFICYP
UNODC
UNCHS
UNIDROIT
UNDESCO
UNCHC
Browse by classification
Community resources
courage is contagious
Viewing cable 09OTTAWA748, Treasury Discussions with Canada Regarding Export Credits
If you are new to these pages, please read an introduction on the structure of a cable as well as how to discuss them with others. See also the FAQs
Understanding cables
Every cable message consists of three parts:
- The top box shows each cables unique reference number, when and by whom it originally was sent, and what its initial classification was.
- The middle box contains the header information that is associated with the cable. It includes information about the receiver(s) as well as a general subject.
- The bottom box presents the body of the cable. The opening can contain a more specific subject, references to other cables (browse by origin to find them) or additional comment. This is followed by the main contents of the cable: a summary, a collection of specific topics and a comment section.
Discussing cables
If you find meaningful or important information in a cable, please link directly to its unique reference number. Linking to a specific paragraph in the body of a cable is also possible by copying the appropriate link (to be found at theparagraph symbol). Please mark messages for social networking services like Twitter with the hash tags #cablegate and a hash containing the reference ID e.g. #09OTTAWA748.
Reference ID | Created | Released | Classification | Origin |
---|---|---|---|---|
09OTTAWA748 | 2009-09-25 19:53 | 2011-04-28 00:00 | UNCLASSIFIED//FOR OFFICIAL USE ONLY | Embassy Ottawa |
VZCZCXRO4793
PP RUEHGA RUEHHA RUEHMT RUEHQU RUEHVC
DE RUEHOT #0748/01 2681953
ZNR UUUUU ZZH
P 251953Z SEP 09
FM AMEMBASSY OTTAWA
TO RUEHC/SECSTATE WASHDC PRIORITY 9882
RUEATRS/DEPT OF TREASURY WASHDC PRIORITY
INFO RHEHAAA/WHITE HOUSE WASHDC
RUEAIIA/CIA WASHDC
RHEHNSC/NSC WASHDC
RUCPDOC/USDOC WASHDC
RUCNCAN/ALL CANADIAN POSTS COLLECTIVE
UNCLAS SECTION 01 OF 04 OTTAWA 000748
SENSITIVE
SIPDIS
STATE FOR E, EEB/TRA, EEB/BTA, WHA/CAN
STATE PASS USTR (SULLIVAN AND MELLE)
TREASURY FOR YUAN AND TVARDEK
E.O. 12958: N/A
TAGS: EIND EFIN EAIR ECON EINV PREL CA
SUBJECT: Treasury Discussions with Canada Regarding Export Credits
for Bombardier C-Series Aircraft
SENSITIVE BUT UNCLASSIFIED. PLEASE PROTECT ACCORDINGLY
¶1. (SBU) SUMMARY: On September 2, Treasury DAS for Trade and
Investment Sharon Yuan, Treasury Director for Trade Finance Steve
Tvardek, Embassy EMIN, Embassy Commercial MC and Senior ECON FSN met
with officials from key GOC departments and representatives from
Canada's export financing agency to discuss the issue of Canadian
export financing in U.S. markets for Bombardier C-Series aircraft.
The central USG message, based on interagency talking points, was
that export financing for Bombardier's new larger aircraft would
almost certainly trigger pressure for matching domestic financing
for Boeing aircraft in the U.S. Canada was urged to adopt the Home
Market Understanding (HMU) utilized by the U.S. and European Union
for more than 25 years, which prohibits the use of export credits
into the markets of producers of competing aircraft or "home
markets". The Canadian officials seemed to appreciate the
opportunity to explore the broad implications of Bombardier's entry
into a new market area but their immediate willingness to adopt the
Home Market Rule or similar measure seems unlikely. A key potential
issue for Canada was their wish to see Brazil and other
aircraft-producing nations similarly bound.
Joint Meeting with Finance, DFAIT and PCO
-----------------------------------------
¶2. (SBU) On September 2, Treasury, Embassy EMIN, CMIN and ECON FSN
held a joint meeting with GOC officials from the Departments of
Finance, Foreign Affairs and International Trade (DFAIT), and the
Privy Council Office(PCO). Treasury outlined concerns based on
interagency talking points regarding possible export credit to
Bombardier C-Series (BCS) aircraft via Export Development Canada
(EDC). In particular, if EDC were to support BCS exports to the
U.S. market, it would create an uneven playing field because there
is no domestic financing available for Boeing. Within the current
economic climate, Canadian export credits would create a competitive
disadvantage for Boeing in its home market (and similarly for Airbus
in the U.S. market as well as in its own home markets). Both U.S.
and the European Airbus consortium countries are fully implementing
the OECD Aircraft Sector Understanding (ASU) including its "Purpose"
section which: "avoids distortion of competition among
Participants..." by adhering to the HMU which proscribes export
financing into producer or "home" markets for competing aircraft.
Treasury urged that Canada, as a new producer of a competing
aircraft, adopt the HMU as well.
¶3. (SBU) Of secondary importance is the issue of classification for
BCS - Category 1 or Category 2 - to be discussed again at the ASU
technical meeting in Paris on October 1, 2009. While the U.S.
expects to have a final position on classification for the October
meeting, Treasury stressed that the primary concern is that the BCS
is, and is being marketed as, a direct competitor to Boeing's 737
family of aircraft, as well as the Airbus 318, 319, and 320 series,
regardless of classification.
¶4. (SBU) Canada responded that the ASU provides a satisfactory
process for new aircraft financing for Canada and their current
position was to wait and see how the classification process unfolded
Qposition was to wait and see how the classification process unfolded
in October before considering additional actions.
¶5. (SBU) Treasury stressed that the uneven playing field would force
the USG to explore a variety of options, including possibly
providing domestic countervailing financing to Boeing. This could
trigger a contagion effect in which the USG and the Europeans could
be forced to become significantly involved in domestic aviation
financing and Canada could find itself in a race to the bottom.
¶6. (SBU) Canada responded that it is an experienced player in export
credit financing and is not trying to carve out a position of
competitive advantage outside of existing international rules.
Furthermore, competition in regional jets from Brazil/Embraer has
been a key factor guiding Canadian decision making (including
adherence to the ASU because Brazil was also bound by the
agreement). At several points in the exchange, Canadian
interlocutors stated that Canada would be strongly opposed to tying
its hands on export financing for the BCS if Brazil were not
similarly constrained. Canada considers the Embraer 195 to be a
competitor to the BCS, especially in the U.S. market. Treasury
reasserted its understanding that Bombardier was marketing the
OTTAWA 00000748 002 OF 004
C-Series to U.S. airlines as an alternative to Boeing 737s, and that
this was supported by the plane's technical characteristics.
¶7. (SBU) When asked, GOC officials confirmed that since Canada had
previously given domestic financing to Bombardier to match Brazil's
Embraer financing for Canadian buyers, it would be prepared, without
major concern, to do so again if Ex-Im financed Boeing sales to
Canada in competing aircraft.
¶8. (SBU) Canada noted that the HMU was precipitated by problems with
the disequilibrium between Boeing and Airbus and that a similar
disequilibrium exists for Canada vis-`-vis Brazil and Embraer.
¶9. (SBU) Canada expressed concerns that the HMU was unwritten - an
opaque agreement among governments that could foster protectionism
and anti-competitive behavior and might be susceptible to anti-trust
actions. Treasury responded that the spirit of the HMU was to
foster a more competitive environment among developed economies by
requiring market financing, in accordance with the principles of the
ASU preamble. While a legal regime would be optimal it was not
possible given the EU's regulatory considerations. Furthermore,
despite its unwritten status, the obligations were clearly
understood by participants and the HMU has been in operation for
over 25 years. Although Canada questioned how it was possible to
uphold the spirit of the ASU by going outside of it. Treasury
offered a clarification that the HMU did not contradict the ASU and
was fully in line with it, including its "Purpose" preamble.
¶10. (SBU) Canada asked a number of follow-up questions:
-- Was there was any pressure from U.S. airlines to retain foreign
export credit? Treasury responded that the USG's concern was
competition in aircraft financing, not airline operations.
-- Does any new U.S. legislative action have to be taken in order to
authorize domestic Ex-Im financing? Treasury responded in the
negative. A legal structure already exists to allow immediate
action.
-- Are Boeing and Airbus engaged in self-financing activities?
Treasury affirmed that this was probably the case. Canada noted that
the larger U.S. producers have more self-financing options than does
Bombardier.
-- What is the US content in the BCS? Estimates around the table
suggested that American content exceeds 60 percent.
¶11. (SBU) The Canadians were asked to outline the nature of the
relationship between EDC and GOC and also the procedures for
financing. They responded that EDC was an arm's-length Crown
Corporation but that the GOC would occasionally consult regarding
particular transactions. This point was clarified during the
subsequent meeting with EDC where it was revealed that on Corporate
Account transactions (source of Bombardier financing), EDC operates
with a great deal of autonomy. There is also a "Canada Account"
where high-risk projects of a national interest may be funded. GOC
provides funds and decision-making for Canada Account transactions
and EDC operates as a conduit.
Concluding Messages
-------------------
¶12. (SBU) Comment: Canadian participants in the inter-ministerial
meeting seemed divided between those willing to consider broader
economic and foreign policy interests and those narrowly-focused on
Bombardier's interests. End comment.
QBombardier's interests. End comment.
¶13. (SBU) Treasury underscored the importance of acting quickly
because of aggressive Bombardier sales campaigns unrolling in the
U.S. If Bombardier were promising to secure EDC financing , GOC
might find itself in the position of having to either support or
repudiate these offers before having carefully considered the
policy issue. Similarly, once USG interventions were set in motion
in response to Canadian financing, it would be very difficult to
return to the status quo because aggressive manufacturers might
capture the process. To this, a Finance official responded,
"Message received." Canada proposed to continue a dialogue on the
issue with U.S., while Treasury emphasized that such a dialogue
should lead to a fruitful conclusion.
¶14. (SBU) A number of the Canadian officials stated that any
arrangement that involved denying access to export credits would be
OTTAWA 00000748 003 OF 004
a "non-starter," especially in the context of a global credit
crisis. One official attempted to frame the issue from the Canadian
perspective during a period when governments around the world were
taking extraordinary steps to save domestic economies and opening up
new sources of credit. He opined that the Minister of Finance would
"go ballistic" if they told him that the US was asking Canada to
stop making lawful interventions in the aviation credit market at a
time when the US is "intervening everywhere else to Canada's
detriment". (Comment: Canada has been particularly hard hit
recently by Buy American provisions for sub-federal spending, Black
Liquor credits and softwood disputes in the forest sector, and
Country of Origin Labeling in the meat sector. In addition, the
large domestic financing programs in the U.S. in response to the
recession are seen by Canada as in some cases providing effective
subsidization to U.S. domestic industries. End comment)
¶14. (SBU) Some of the Canadians present expressed a preference for
'tweaking' the ASU rather than adopt the HMU in order to find an
acceptable solution. While there seemed to be good will on both
sides, Canada expected that other aircraft-producing states would
have to be brought to the table before the issue was resolvable.
Meeting with Export Development Canada
--------------------------------------
¶15. (SBU) Similar to earlier presentation to the GOC
inter-ministerial group, Treasury set out concerns regarding BCS
export credits in the U.S. market. Canada was encouraged to let
aircraft compete on their own merits in a competitive environment.
¶16. (SBU) EDC made assurances that no commitments had been made to
Bombardier regarding C-Series financing and none will be made until
the aircraft is classified. However, a comfort letter has been sent
to a potential BCS buyer outlining an ASU-compliant financing
process in general terms. After classification, EDC will look at
potential sales on a case-by-case basis using current risk
assessment and transaction evaluation tools. EDC noted that the ASU
provides certainty of credit but not its price.
¶17. (SBU) When asked, EDC said it did not have an opinion regarding
the possibility of Ex-Im financing for competing Boeing aircraft
into Canada. EDC confirmed that it had supplied funds to Bombardier
for aircraft other than the BCS to counter Embraer sales in Canada.
¶18. (SBU) EDC asked whether potential U.S. domestic financing for
Boeing would match EDC financing for Bombardier. Treasury affirmed
that this would likely be the case.
¶19. (SBU) EDC echoed GoC concerns about Canada's vulnerability if
Brazil were not similarly bound by HMU and the plausibility of
Embraer 195 as a substitute for BCS. Treasury responded that in the
Southwest Airlines case, the airline was looking to replace 737s,
not regional jets. Treasury made that point that there would
inevitably be overlaps at the margins between Category 1 and
Category 2 aircraft- breaking points would be contentious but that
the BCS's main competitors were Category 1 aircraft.
¶20. (SBU) The meeting concluded with EDC speculation on future
prospects for Bombardier. In the past, Bombardier had received EDC
financing for around 40 percent of its sales but now it is up around
Qfinancing for around 40 percent of its sales but now it is up around
75 percent. EDC estimated that the financial strength of Bombardier
was not sufficient for them to finance C-Series purchases on their
own. Also, Bombardier's business jet business would soon be
eclipsed by the C-Series - with United States and European Union as
key markets.
¶21. (U) Attending the meetings for USG Treasury: Sharon Yuan, Deputy
Assistant Secretary, Trade and Investment; and Steve Tvardek,
Director, Trade Finance. Embassy Ottawa: Eric Benjaminson, Minister
Counselor for Economic Affairs; Stephan Wasylko, Minister Counselor
for Commercial Affairs and Laura Dawson, Senior Economic Specialist.
¶22. (U) Attending for GOC Finance: Jim Haley, General Director,
International Trade and Finance; Lise Carrihre, Senior Chief,
International Trade and Finance; John Layton, Chief, Trade Rules,
OTTAWA 00000748 004 OF 004
International Trade and Finance; and Kim McIntyre, Economist,
International Trade and Finance. GOC DFAIT: Ian Burney, Assistant
Deputy Minister, International Business Development, Investment and
Innovation; Julie Insley, Director, International Trade Portfolio
and Strategic Analysis (including international financing); Nadine
Mawle, Senior Policy Analyst, International Trade Portfolio and
Strategic Analysis; and Peter McLachlan, Commercial Policy Analyst.
GOC Privy Council Office: Kathleen Cooper, Policy Analyst, Economic
and Regional Development Policy. EDC: Glen Simpson, Senior Advisor,
Financing Centre of Expertise and International Relations Team; Taso
Georgiou, Director, Aerospace Team; and Caroline Dabrus, Director,
Financing Centre of Expertise and International Relations Team.
¶23. (U) This cable was cleared by Treasury DAS Yuan and Director
Tvardek.