The Boeing purchase would give Canada a rapid deployment capability greater than that of the British Army and Royal Air Force.

The Harper government has moved to counter criticism of a lack of competition by giving potential bidders 30 days to indicate whether they have aircraft capable of meeting the stated requirements. The purchase of 17 tactical transports will be open to competition, the British publication Flight International reported in its July 11 edition.

Public Works and Government Services Canada, which is handling the procurements, says "preliminary industry research" indicates the C-17 and CH-47 are the "only known aircraft" capable of meeting the stated requirements "in a timely manner".

The strategic transport requirement calls for deliveries to begin within 18 months of contract award and be completed within 48 months. The helicopter requirement calls for deliveries to begin within 36 months and be completed within 60 months, Flight International said.

To "make sure" there are no other aircraft meeting its requirements, Canada will issue an advance contract award notice or ACAN in each case, giving potential bidders 30 days to submit a "statement of capabilities that clearly demonstrates how the supplier meets all the advertised requirements", PWGSC said.

Airbus Military and charter provider Skylink Aviation say they are awaiting release of the strategic transport ACAN before deciding whether to pursue unsolicited bids they had submitted in advance of the Canadian decision to buy, Flight International said.

The giant air transport deal with Canada comes at a good time for Boeing. After lean years, the company is riding high again in the commercial airliner market.

With a legal settlement in the World Trade Organization unlikely for at least several years, Boeing has regained supremacy over rival Airbus in the marketplace. Boeing has taken orders for about three times as many new commercial airplanes as Airbus in the first half of 2006, according to data from aviation analyst firm the Teal Group. This is the first time since 2000 that the American company, Boeing has outsold its European competitor.

Things are darker at Airbus. hrough the first half of this year, the British Broadcasting Corp. reported that Airbus took orders for about 150 planes, a steep drop from 2005. Production delays on the wide-body jet A380 and the closely-timed, yet unrelated resignations in June of Airbus boss Gustav Humbert and one of its parent companies, EADS co-executive Noel Forgeard compounded the difficult times across the Atlantic.

Last week, the BBC also reported BAE Systems - Airbus's other parent company - would audit Airbus. Investment bank Rothchild recently gave BAE a low valuation because of its 20 percent stake in the troubled Airbus.

It is Boeing's position in the American defense industry that aggrieves Airbus. The European Union says, in its argument on behalf of Airbus before the WTO, the billions of dollars worth of research and development contracts with the U.S. Department of Defense and the National Aeronautics and Space Administration amount to a prohibited subsidy, as do tax breaks from Washington, Kansas and other states where Boeing is a significant employer.

These tax abatements and government projects have a spillover effect in the commercial air industry, providing Boeing with an unfair advantage, according to the EU.

"The Airbus parents EADS and BAE System combined defense contracting is larger than Boeing's. If there is some benefit that flows from defense contracts, then Airbus would receive it also," Boeing spokesman Dick Dalton told UPI.

Dalton said BAE had extensive contracts with the Pentagon, as well as with European militaries. In 2002, it ranked 16th among companies with $1.15 billion in American defense contracts, according to information from the Department of Defense's website.

Boeing was the second largest contractor with the DOD in 2002. It procured more than $16.5 billion of work from the Pentagon.

Airbus must defend itself against Washington's contention in the WTO that "launch aid" some European government provide to it is an illegal, direct subsidy. "Launch aid" is loans to invest in new aircraft that is repayable only if the technology turns a profit, according to the BBC.

Airbus's North American office did not return calls for comment.

The international mechanism designed to resolve trade disputes like these will take years to decide the outcome of the case, if it ever does at all, according to Robert Herzstein, former Under Secretary of Commerce. Herzstein told a meeting Thursday at the American Enterprise Institute that the subsidy allegations were too complicated for the WTO to handle and it was unlikely that either the United States or EU would comply with a defeat in an industry where the stakes are as high as aviation.

The United States and European Union entered complaints in the WTO on behalf of their respective companies within hours of each other in October 2004. The case has proceeded fitfully since then.

"The lines of communication are open, but there hasn't been any substantive change in the situation," since the case began, Steve Norton, a spokesman for the United States Trade Representative, told UPI.

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