Statement on the Final Report of the WTO Dispute Settlement Panel on Canadian Automotive Trade Policy
FOR IMMEDIATE RELEASE, FEBRUARY 14, 2000
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.