Published Date : Oct 08, 2015
Automakers in Canada are still getting adjusted to the recently signed Pacific Rim Trade deal. The Trans-Pacific Partnership (TPP), largely backed by the United States, is a 12-nation pact including Japan and other Asian countries that marks a significant change in the U.S. trade interests to Asia. Conservative leader Stephen Harper has stated that if Canada was out of this deal, it would had been more difficult for the automobile industry in Canada. This trade deal supersedes NAFTA that had helped Canadian automakers to get access to the American market for a long time.
Under the TPP, a 6.1% levy on auto imports would be worked out in the duration of next five years. Cars having 45% content from TPP would be allowed into Canada without tariffs. This is lower than the threshold of 62.5% under NAFTA. However, the autoworkers union has pointed out that the concessions on auto trade offered by the government in the latest negotiations will cost around 20,000 jobs in the country.
Harper has promised that the government would help with long-term funding to assist the auto industry in adjusting with the new deal. If re-elected, the Conservatives would assist the auto industry with US$1 billion over the next decade, starting from 2018. The auto industry has pointed out that this is quite less as compared to the US$4.3 billion fund allocated to the country’s dairy industry over the period of next 15 years. Though Harper has lauded the benefits of the TPP, the differences in the opinion is quite visible. Around two dozen auto workers at the GM assembly plant in Oshawa have protested against the deal.