For Immediate Release
June 1, 2000
Statement on the Final Appellate Report of the WTO Dispute
Settlement Panel on Canadian Automotive Trade
Policy
The WTO appellate report released on May 31, 2000 has upheld
the key findings of the dispute settlement panel’s final report issued earlier
this year. These reports confirm that changes are necessary to bring Canadian
automotive tariff policies related to the Auto Pact 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 changes to ensure equal treatment for all automakers in
Canada. Moreover, we urge the Canadian Government to make a commitment to remove the Most Favoured Nation (MFN) tariff on finished vehicles as soon as
possible.
Since the FTA in 1989, auto tariff policy in Canada created a
fragmented two-tiered industry that treated some automakers more favourably than
others. In addition to being in contravention of WTO rules, this policy created
negative signals for international automakers and parts manufacturers that had
invested, or that might have considered investments in Canada. However, with
this report, the Canadian Government is obliged to address the discriminatory
aspects of the current policy, and at the same time consider the long term
benefits for both automakers and consumers in Canada from the elimination of
tariffs on finished vehicles. And by eliminating import duties on finished
vehicles, Canada would also be matching the current 0% MFN tariff on vehicles
and parts in Japan.
The Canadian auto industry is healthy, competitive and
profitable. At the same time, it is heavily dependent on trade due to the fact
that over 80% of all autos made in Canada are exported, while the majority of
vehicles sold in Canada are imported. With twice as much production as
consumption in Canada, tariffs only add non-manufacturing costs that, in a
highly competitive market, are a burden for both automakers and consumers.
Contact: David Worts, Executive Director
(416) 968-0150
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
FOR IMMEDIATE RELEASE
June 10, 1998
JAMA Canada Disappointed by the ‘Status Quo’ Results of
the Federal Auto Review on Tariffs and Trade Policy
Toronto, Ontario: JAMA Canada is very disappointed to learn that there
will be no change to the current discriminatory application of import tariffs on finished
vehicles. The report of the Federal Government’s Automotive Competitiveness Review
was released earlier today.
Commenting on the result, David Worts, Executive Director of JAMA Canada
said, "Quite simply, the status quo is not an acceptable position. Differential
treatment under the current two-tiered auto policy clearly favours one group of automakers
over another. We will continue to seek changes with the Federal Government to establish a
policy that is open, transparent and applied equally to all automakers consistent with
international trade rules under the WTO."
While tariffs are a significant part of the problem, this issue is
primarily a matter of principle – the principle of non-discrimination. This issue arose
from policy changes in the FTA which closed the Auto Pact to new entrants and terminated
non-Auto Pact duty remission programs. At the same time, studies have shown that lower
tariffs enhance trade and investment, and are beneficial for consumers.
"All automakers in Canada are foreign owned. It only makes sense, not
to mention good policy, to treat all of them equally", said Mr. Worts.
In an increasingly global industry, success along with jobs and investment
are largely dependent on meeting customers’ needs with competitive products at
competitive costs. Tariffs have been coming down under the GATT for the past 50 years.
Canada’s auto industry has never been as strong as it is today, not because of
protection, but because of global competition and international cooperation.
For further information, contact:
David Worts, Executive Director
JAMA Canada
Tel. (416) 968-0150
Fax (416) 968-7095
Email: [email protected]
|
