Seeking Common Ground: Canada-U.S. Trade Dispute Settlement Policies in the Nineties

By Andrew D. M. Anderson | Go to book overview
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it is unlikely that governments will stop targeting industries or firms for support, and second, better research results may help in fact to control governments worst excesses, which may lead to increased efficiency in the use of the publics purse to support industry.

For example, the big three U.S. automakers -- General Motors, Ford Motor and Chrysler -- in 1991 launched an AD case against Japanese importers of minivans, although the case was eventually dropped ( Toronto Star 1991e). The AD action occurred even though Japanese minivans at the time were priced higher than comparable U.S. products. A subsequent threat of an AD action in 1993 by the "Big Three" against Japanese auto producers forced them to raise the price of their products in the United States. This action is compounded by the rapid rise in the value of the yen, which makes the value of sales in the previous six month period appear lower than they really were, adding to the ease of proving "dumping" ( Awanohara 1993). The U.S. automakers also had the benefit of being sheltered from Japanese import competition for virtually the entire 1980s under previously negotiated voluntary export arrangements with Japan ( The Economist 1993a).
It is also not entirely clear that Canadian business -- Canadians in general -- could adjust that dramatically. For, as Gray ( 1990:2) contends, "[i]n a world in which some concept of national character or identity exists (i.e., there is a distinctive set of collective values with respect to economic policies which enter into the national welfare function), neither free trade nor full integration need be optimal (or even second best). Economic analysts have ridden roughshod over the idea of national character in their search for Pareto's elusive optimum, by assuming that each individual has a given and independently determined set of tastes." Also see Simeon ( 1990). There is also evidence that the advantages a business has may even be "culturally" site specific within one part of a firm, based on research in Japan ( Fruin 1991). That adopting foreign business practices containing a cultural element is difficult can further be seen by the U.S. automakers' failure to adopt Japanese-style supplier relationships. The problem was not that the small suppliers did not change but that the top management of the "Big Three" automakers were not able to get their companies to change by adopting innovations from their suppliers. This problem was accentuated by the auto manufacturers falling back on the old habit of gouging their suppliers profits when hard times struck by forcing them to lower their prices ( Mangelsdorf 1991).
For some of Canada's objectives, see Hart ( 1992), who was a Director of Economic and Trade Analysis in Canada's Department of External Affairs and International Trade.
A good example of this was the federal government's decision to allow a large shipbuilder -- Versatile Pacific Inc. in Vancouver -- to go bankrupt and then to give C$263 million to the MIL-Davie shipyard in Quebec. It is not hard to find other such decisions where there is no currently written or expressed policy as to the logic behind Ottawa's "industrial" spending decisions ( Toronto Star 1991d and Osbaldeston 1987).


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Seeking Common Ground: Canada-U.S. Trade Dispute Settlement Policies in the Nineties


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