Canadian Jobs Said Threatened by Unilateral Automotive Free Trade

By Darkes, Maureen Kempston | Canadian Speeches, December 1997 | Go to article overview

Canadian Jobs Said Threatened by Unilateral Automotive Free Trade


Darkes, Maureen Kempston, Canadian Speeches


President, General Motors of Canada

The Government of Canada is accused of a step-by-step dismantling of the 1965 Canada-U.S. Auto Pact, the corner stone of Canada's automotive manufacturing industry. The Pact provided duty-free access to the Canadian market for the big three automotive makers who committed to maintain certain minimum levels of production and purchasing in Canada. With the resulting free trade in vehicles and parts between Canada and the United States, the automotive industry has boomed in Canada, providing more than half a million jobs. But Japanese car makers Honda and Toyota are seen as enjoying increasing reductions in import duties without having to make similar commitments to Canadian production and purchasing. Elimination of the tariff on all imported vehicles is said to be under serious consideration by the government. But instead of unilateral tariff elimination, the government is urged to seek multilateral agreements that would provide free access for Canadian products in foreign markets in return for free access to the Canadian market. Speech to the University Club of Montreal, November 26, 1997.

I have just come back from the Asia Pacific Economic Co-operation activities in Vancouver over the past week, which highlighted for me how important it is for the Canadian economy to look ahead and anticipate the world of tomorrow -- and to position our country and our economy to continue to grow fully and participate in the emerging global economic order.

Commentators have suggested that if the 1990s was the era of the Atlantic, the next century will be the millennium of the Pacific. Certainly it is true that Asia Pacific will grow to become the largest automotive market by 2006 and it is forecast that the top six world economies in 2020 will be APEC members.

Now trade has shaped Canada's economy and growth for 400 years -- initially between the native Canadians and voyageurs who first penetrated into our beautiful country, and in every successive century, as new industries emerged and our country grew as a nation.

In the 20th century, our world has been transformed by the automobile -- both in the mobility it has given us as individuals and as the engine of economic development that it has been for the Canadian economy. Today, the Canadian auto industry accounts for 11% of Canada's manufacturing GDP and over half a million jobs.

Since the Canada-U.S. Auto Pact was negotiated in 1965, employment in the industry has tripled, an entire auto parts manufacturing industry has grown, and Canadian consumers have access to a wide array of automotive products at among the lowest prices in the world.

Like many countries have done and are doing today, Canada recognized in the 1960s that the auto industry could act as a strategic sector for growth -- to develop high-skill, high-wage jobs, transportation systems, and a currency infrastructure -- and negotiated what has been called "the most successful free trade agreement in history" to facilitate this growth.

The 1965 Canada-U.S. Auto Pact provided for free and fair trade by providing duty-free access to the Canadian market to those manufacturers who made commitments to production and sourcing here. The Auto Pact put in place safeguards to ensure that duty-free access would be earned and that Canadians would have jobs and investment.

Today the Auto Pact is threatened. There are those who want to eliminate it and take away all the elements of free and fair trade that ensure that Canadians continue to have jobs and investment in the global automotive industry.

There is a lot at stake in the discussion -- and recent moves by the federal government indicated that it does not clearly or fully comprehend how critical the auto sector is to Canada's heath.

This is an emotional issue for us Canadian employed in the auto industry. But for sound public policy making to take place, we need to take away the hyperbole and emotion and take a hard, rational look at the facts. …

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