UPDATE 1-Canada's Trudeau says trade to weigh on Bombardier aid decision

(Adds background, lawyers' views)
By David Ljunggren and Randall Palmer
OTTAWA, Nov 12 (Reuters) - When the Canadian government
decides whether to give aid to aircraft maker Bombardier Inc
BBDb.TO , it will take into account any possible trade
challenge that might arise as a result, Prime Minister Justin
Trudeau said on Thursday.
"We will ensure that any decision taken is in the best
interests of Canadians based on a strong economic case, but
concerns about international impacts I'm sure will fold into any
decision we take in a responsible manner," the Liberal leader
said when asked by a reporter about possible trade action.
Rival plane maker Embraer SA EMBR3.SA of Brazil expressed
concern on Tuesday about the Canadian province of Quebec's
decision to purchase a near-50-percent stake in Bombardier's
struggling CSeries airplane project for $1 billion, and Ottawa
is considering whether to give federal aid as well.
Canada and Brazil fought a fierce trade dispute at the World
Trade Organization over accusations of subsidies to Bombardier
and Embraer in the 1990s.
Any dispute over Canadian aid to Bombardier this time could
draw in much bigger combatants, since the CSeries would compete
with Boeing (N:BA) BA.N and Airbus AIR.PA planes.
"The decision on Bombardier will be taken by the minister
(of innovation, Navdeep Bains) based on facts, recommendations
and economic reasons. It's always tempting to take a political
decision, or a decision based on symbols," Trudeau said.
"We will base our decision on economic facts and the
benefits for Canadians."
Veteran trade lawyer Peter Clark, who advised Embraer in the
1990s but is not working for it now, said that while direct
export subsidies violated international rules, even government
investment in such a project was likely to be challenged.
"It's keeping an aircraft alive that's going to compete with
Boeing and with Airbus, and I don't think they'll sit idly by,"
Clark told Reuters.