National Post

Side letter fails to soothe CPTPP auto critics

- Alicja Siekierska

TORON TO • Some representa­tives of the Canadian auto i ndustr y have dismissed the federal govern- ment’s newly released side letter with Japan on motor vehicles as “useless”, saying the document will not help Canada gain access into the Japanese market as Canada’s trade minister has promised.

Side letters with 10 countries were released shortly after Canada’s trade minister François-Philippe Champagne signed the Comprehens­ive and Progressiv­e Agreement for Trans- Pacific Par t nership ( CP TPP) in Santiago, Chile on Thursday. Canada is expected to ratify the deal later this fall, as it has to pass legislatio­n through Parliament.

The document signed with Japan on motor vehicles, which Champagne has touted as a major victory that will grant greater access to the Japanese market, says Canada will not face nontrade barriers.

“I confirm that Canada is not and will not be discrimina­ted against in the applicatio­n of Japan’s non-tariff measures on motor vehicles,” the side letter, signed by Champagne and Japan’s Minister of Economic revitaliza­tion Toshimitsu Motegi reads.

Speaking on a conference call with reporters from Santiago, Champagne said the side letter with Japan will put the Canadian auto sector “in a much better position.”

“The side letter will remove non- tariff trade barriers which were present for a long time in the auto sector, both in Canada and the U. S., with respect to the safety standards allowing for Japan to recognize our Canadian standards to make it easier for the Canadian automotive sector to access that market,” Champagne said.

However, Flavio Volpe, president of the Automotive Parts Manufactur­ers Associatio­n, said the side letter does not touch upon the i ssues the auto i ndustry hoped to address that would open up the Japanese market. He also called Champagne’s claims “laughable.”

“The side letters do not inventory any of the non-tariff barriers to sales in Japan that the Canadian auto sector repeatedly raised with the government,” Volpe said.

The side letter says that vehicles manufactur­ed in Canada certified under Japan’s Preferenti­al Handling Procedure, a process which allows exporters to sell cars in Japan if they comply with certain procedures, will benefit from streamline­d testing.

Japan and Canada are also co- operating on developing an enforceabl­e dispute settlement mechanism, the document says, that would apply to the side-letter agreement.

David Worts, executive director of the Japan Automobile Manufactur­ers Associatio­n of Canada, said the side letter will help address some of the issues Canadian auto representa­tives had previously cited, including access to the Japanese market. “The door is open,” he said. But Unifor president Jerry Dias, whose union represents more than 23,000 Canadian auto workers, said “the side letters mean nothing” and that they are “unenforcea­ble.”

“Ultimately, you can’t get away from the fact that you’re going to have more Japanese vehicles imported to the Canadian market, and we’re going to have no access there.”

While Volpe and Dias have been vocal in their criticism of the CPTPP, some auto organizati­ons have been supportive of the agreement.

Linda Hasenfratz, t he chief executive of Canada’s second- largest auto parts manufactur­er Linamar Ltd., previously said the trade agreement will create “huge opportunit­y for Canadian companies to become more global and grow in a while variety of sectors.”

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