Boeing Co.’s allegation that future imports of Bombardier Inc aircraft threaten material injury is based on speculation that is prohibited under U.S. and international trade law, Canada’s ambassador to the United States said on Monday.

In his statement before the U.S. International Trade Commission (ITC), Ambassador David MacNaughton said that under World Trade Organization (WTO) agreements, the determination of threat of material injury “cannot be based on ‘allegation, conjecture or remote possibility.'”

The U.S. Commerce Department earlier this year backed proposed trade duties on Bombardier CSeries jets of nearly 300 per cent after Boeing claimed its Canadian rival used billions of dollars in illegal government subsidies and dumped its newest jetliner in the United States below cost. 

The U.S. Department of Commerce is due to finalize the proposed duties this week. The ITC hearing is one of the final steps in the trade dispute due to conclude in February. 

Trade lawyers and analysts have said that depending on the outcome, the row could shift to a larger stage as Canada ponders a complaint to the WTO or through the North American Free Trade Agreement. “Positive evidence on the record does not show any actual or planned exports by Bombardier to any U.S. airline,” MacNaughton said. 

“Therefore, Boeing’s assertion that future imports from Canada threaten to cause material injury is necessarily based on just the type of ‘speculation and conjecture’ that is prohibited under both U.S. and international law,” he said. MacNaughton also said that WTO agreements and U.S. law require the threat of injury to be based on evidence of imminent imports. 

“Bombardier has not exported any of the aircraft that are the subject of this case to the United States. This is undisputed,” he said. Canada last week scrapped plans to buy 18 Boeing fighter jets and made clear the company had little chance of winning a larger contract unless it dropped the trade challenge against Bombardier.