Speech3

North York Room, Westin Prince Hotel October 23, 2000

Good evening, ladies and gentlemen. As Chairman of JAMA Canada,
I would like to welcome you and to thank you for taking time from
your busy schedules to be with us here today.

Our main purpose in holding this reception is to introduce the
President & Vice Chairman of JAMA in Tokyo, who is here in Canada
on his first official visit. But before we ask Mr Suzuki to say
a few words, I wanted to make some observations about the state
of the industry in Canada.

This is certainly an auspicious time for the Canadian auto industry.
At the same time, we are participants in a rapidly changing global
industry that, daunting as it may seem, creates a host of new challenges
and opportunities for automakers, suppliers, governments, workers
and consumers.

Take for example: the impact of information technology (IT), wireless
communications and the internet; traffic congestion in urban centres
and the promise of ITS (intelligent transportation systems); globalization
and international harmonization of standards and regulations; environmental
issues including global warming, rising oil prices, and alternative
fuel technologies, to name a few of the complex issues that we face.

As I think everyone here is aware, the auto sector is a key driver
of the Canadian economy in terms of jobs, investment, trade and
technology. Production, exports, sales, and employment are as high
as they have ever been.

Altogether, Canada accounts for about 18% of North American output,
while we consume less than 10% of annual North American sales. No
wonder Canada’s auto trade surplus stands at more than $8 billion
in the first half of 2000.

Companies continue to invest and plants are expanding. Honda in
Alliston officially began producing the Acura MDX earlier this month,
and TMMC in Cambridge will be the first plant outside of Japan to
build the Lexus RX300 in 2003.

At the same time, Canadian auto parts companies like The Woodbridge
Group and ABC Group have established plants in Japan. In fact, Woodbridge
recently opened its third plant in Japan with its partner Inoac.

And more Japanese auto parts investments are coming to Canada.
In August, Ube Manufacturing Canada became the 40th Japanese affiliated
parts plant to be established here. And just last week, Toyoda Gosei
broke ground for its new plant in Palmerston, Ontario.

With growing auto investments in North America, all JAMA Canada
members are sourcing more locally. Currently about 3 of every 5
vehicles sold are built within NAFTA. Annual production capacity
in Canada is 750,000 units, more than twice our sales last year.
Altogether about 50,000 Canadians are employed manufacturing, selling,
servicing, exporting and importing vehicles and parts.

The strength of the sector in Canada depends to a great extent
on a well-educated and dedicated workforce, positive economic factors
including low inflation, low interest rates, balanced budgets and
reduced government debt, as well as the strong confidence of the
Canadian consumer.

Open trade and access to other markets is also critical to sustain
the level of production and export of parts and vehicles. While
the majority of Canadian-built vehicles are shipped to the US, almost
6,300 Odyssey minivans have been exported from Ontario to Japan
over the past 12 months.

Finally, a word about tariffs and trade. A few weeks ago, the Canadian
Government accepted the decision of the WTO to finally end the Auto
Pact by February 19, 2001. This change will establish equal treatment
and open competition for all automakers in Canada. At the same time,
we agree with Simon Reisman, the Canadian trade negotiator of the
Auto Pact and the FTA, that the 6.1% MFN tariff should be eliminated
on all vehicle imports. While there is a good case for unilateral
reduction, we would also support tariff cuts in the next round of
multilateral trade negotiations.

In short, it is astonishing how much the industry has changed and
grown over the last twenty years. Of particular note is how much
the relationship between the auto industries in our two countries
has deepened and matured. It’s hard to say what will happen over
the next 20 years, but I expect the trend toward closer international
cooperation and integration will continue even as global competition
gets tougher. I thank you again for being with us today.