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February 14, 2000
Statement on the Final Report of the
WTO Dispute Settlement Panel
on Canadian Automotive Trade Policy
While an appeal by the Canadian Government will delay adoption of the
final report, it appears that the WTO dispute settlement panel has found
that changes are necessary to bring Canadian automotive tariff policies
into line with international trade rules.
In practical terms, JAMA Canada continues to urge the Government of Canada
to adopt trade policies that are open, transparent and non-discriminatory,
with measures that ensure equal treatment for all automakers in Canada.
More specifically, Most Favoured Nation (MFN) tariffs applied to finished
vehicles should be eliminated as soon as possible. Tariffs are no longer
necessary to protect the auto industry in Canada, and only add non-manufacturing
costs that are a burden for both automakers and consumers.
Since the FTA in 1989, auto tariff policy in Canada created a fragmented
two-tiered industry that treated some automakers more favourably than
others. Among other things, this current policy undermines Canada’s ability
to attract future automotive investment.
JAMA Canada would have preferred that this issue had been resolved domestically
at the time of the Federal Government’s Automotive Competitiveness Review
in 1998. However, with this WTO report the Canadian Government has another
opportunity to address the discriminatory aspects of the current policy.
Moreover, the recent collapse of the WTO talks in Seattle, aimed at setting
the agenda for the start of the next round of multilateral trade negotiations,
makes resolution of this matter more urgent. In the event that the so-called
‘Millennium Round’ gets underway later this year, we urge the Government
of Canada to eliminate tariffs on all automotive products, to reflect
the 0% tariff on vehicles and parts in Japan.
Today the auto industry in Canada is generally healthy, competitive and
profitable. At the same time, it is also highly dependent on trade and
foreign investment. What’s more, around the world, the auto industry is
constantly being challenged by consumers, by technology and by governments
to provide reliable, affordable products that are designed for both safety
and preservation of the environment. It is no surprise that policy changes
are also needed in Canada to reflect higher levels of international competition
and cooperation, as well as to reaffirm a strong commitment to the rules-based
trade system entering the 21st century.
The WTO Final Panel Report is available at www.wto.org
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