The Star: Canada Auto Industry to Receive $1B from Gov’t for TPP Harm

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Under the Trans-Pacific Partnership deal, cars would be allowed into Canada without tariffs as long as
they have 45 per cent content from the TPP, lower than the 62.5 per cent threshold under NAFTA.

OTTAWA—Conservative Leader Stephen Harper promised long-term funding to help the auto industry adjust to the newly-signed Pacific Rim trade deal and said automakers would have been worse off if Canada had not signed the 12-nation pac

[Reposted from The Star  |  Les Whittington  |  October 6, 2015]

“We believe that this deal offers enormous benefits for the automobile sector,” Harper said at a manufacturing facility that serves the auto industry in Whitby.

“In fact, I would go to the other extreme, which is if we were outside this deal, that would be devastating to the sector,” he said.

The Trans-Pacific Partnership (TPP), which came together in negotiations over the weekend, was largely driven by the United States.

The free-trade deal involving Japan and other Asian countries marks a significant shift in U.S. trade interests to Asia.

The trade pact supercedes NAFTA, which was the latest in a series of free-trade arrangements between Canada and the U.S., which, for decades, helped Canadian manufacturers, particularly automakers, prosper by ensuring special access to the American market.

Unifor, the union representing autoworkers, said the concessions on auto trade offered by the Harper government in the recent negotiations will cost 20,000 jobs in Canada.

“This is recognition that they threw the auto industry under the bus under the TPP deal,” Unifor President Jerry Dias told CBC-TV.

But Harper said Canada’s vehicle manufacturers would be in trouble if Canada were not part of a free-trade pact involving the U.S.

“The long-term survival of this sector depends on the attraction of continental and world mandates for production in this country,” he told the media. “And, if we are not part of the trade network that our partners in the United States, in particular, and Mexico are, we would simply, in the long term, be putting ourselves outside of those opportunities.”

If re-elected, the Conservatives would provide $1 billion over 10 years beginning in 2018, when a current Automotive Innovation Fund expires, to help the auto industry deal with the reduction of protective tariffs under the TPP.

Harper faced questions Tuesday about why the auto sector is getting less money than dairy farmers.

“Look, it’s always a matter of, ‘How much?’, “ Harper said, a day after he announced the federal cabinet had already approved a 15-year, $4.3-billion fund to protect the dairy industry.

“We want these benefits to, ultimately, be of significant net benefit to the Canadian economy. We don’t want it to be all taxpayers doing it,” he said, explaining why his government wasn’t spending more to bolster vehicle manufacturing.

Harper stressed that it would be unfair to compare the supply-management sector of dairy with the export-oriented auto business.

Under the program announced Tuesday, grants would be offered to companies that make firm commitments to build new auto-assembly plants.

“The programs we have here are not compensation programs,” Harper said. “They are incentive programs to attract this kind of investment into the sector and keep this kind of investment in the sector.”

But as Harper lauded the merits of the TPP, resentment simmered outside; about two dozen auto workers from the nearby GM assembly plant in Oshawa protested.

Under the tentative trade agreement, a 6.1-per-cent levy on auto imports would be phased out over five years. Cars would be allowed into Canada without tariffs as long as they have 45 per cent content from the TPP, which is lower than the threshold of 62.5 per cent under NAFTA.

—with files from Canadian Press

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