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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Today, the Government of Canada has repealed the Auto Pact and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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