Japan Automobile Manufacturers Association of Canada

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JAMA Canada Statement on Repealing the Auto Pact

FOR IMMEDIATE RELEASE, FEBRUARY 19, 2001

Today, the Government of Canada has repealed the Auto Pact and various Special Remission Orders because those programs were found to contravene international trade rules. JAMA Canada supports the decision of the Canadian Government to comply fully with the WTO ruling. Ending the Auto Pact will finally create equal treatment for all automakers in Canada.

With respect to attracting investment and creating jobs in Canada, it is widely acknowledged that the Auto Pact has not been a factor for many years. Moreover, the FTA in 1989 made the Auto Pact redundant. And while repealing the Auto Pact will end discriminatory tariff treatment, JAMA Canada would urge the Canadian Government to take the final step and remove the remaining 6.1% MFN tariff on finished vehicle imports. Not only is the tariff an unnecessary cost burden for both automakers and consumers, it is also substantially higher than the 2.5% MFN tariff applied to passenger vehicles in the US, or the 0% tariff in Japan.

Since the mid 1980’s, the auto industry in Canada has changed dramatically. Over the last few years, production, sales, exports and employment have all reached record levels. Growth of Canadian auto manufacturing has occurred as result of adjustments in response to international competition and cooperation, not protectionism and managed trade.

With respect to Japanese auto investments in Canada, by 2003 there will be over 750,000 units of production capacity at Canadian operations of Honda, Toyota and CAMI, which represents about twice the level of current sales of all JAMA Canada members. Since 1993, over 1 million more vehicles have been exported from these three plants than have imported by all JAMA Canada members from Japan, the US and Mexico combined. And presently, over 50,000 Canadians are employed in the manufacture, export, import, distribution, sale and service of Japanese affiliated vehicles and parts. Among other things, these ongoing activities and investments are a clear vote of confidence in the future of the Canadian auto industry.


 

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