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trade dispute

Ottawa is holding the Boeing Super Hornet contract as its main bargaining chip in its fight on behalf of Quebec-based Bombardier.

The American government has put a price tag of $6.4-billion on the sale of 18 Super Hornet jets to the Canadian military, even though Ottawa has vowed not to strike a deal with the aircraft's manufacturer, Boeing Co., over an unrelated trade dispute.

In a letter of notification to Congress on Tuesday, the U.S. Department of Defence said it supported the potential military sale to Canada of 18 fighter jets, eight spare engines and other military hardware and equipment.

"This proposed sale will contribute to the foreign policy and national security objectives of the United States by helping to improve the security of a NATO ally which has been, and continues to be, a key democratic partner of the United States in ensuring peace and stability," the American agency said.

However, the U.S. Department of Defence pointed out that the notice to Congress "does not mean the sale has been concluded."

Ottawa has been engaged in an increasingly bitter dispute with Boeing, which filed a complaint last April against Canadian-based Bombardier Inc. with the U.S. Department of Commerce.

The federal government has used the Super Hornet acquisition as its main bargaining chip in its efforts to get Boeing to drop its case against Bombardier over allegations of illegal subsidies and dumping.

Still, the acquisition of 18 Super Hornets, which Ottawa announced last year, is ongoing throughout the dispute.

On March 13, the federal government sent a formal "letter of request" to the U.S. government in which it laid out the requirements for 18 Super Hornet aircraft, including precise questions on specs, delivery schedule and economic benefits.

"As early as fall 2017, Canada expects to receive a response from the U.S. government. The proposal will be reviewed to determine if the U.S. government can provide the interim solution at a cost, schedule, level of capability and economic value acceptable to Canada. If this process is successful, Canada could enter into a formal agreement with the U.S. government for the interim aircraft and associated elements of in-service support as early as the end of 2017 or the beginning of 2018," the federal government said at the time.

The federal government has stopped talking directly to Boeing about the Super Hornet acquisition because of the Bombardier dispute. However, under the process known as a "foreign military sale," the Canadian government is officially a client of the American government in this ongoing acquisition.

"We understand the formal Congressional notification process has started. At this time we must defer to the US government on any official details, but we are encouraged by the U.S. government's support for this important capability in the defense of North America," Boeing said in a statement on Tuesday.

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