THE DETAILS, FROM AUTOS TO ONLINE.

SHARES OF PARTS SUPPLIERS SURGE AS TRADE DEAL REMOVES TARIFF THREAT.

Canada’s eleventh-hour inclusion in the new North America free-trade deal removes a major overhang for auto suppliers but doesn’t fix many of the competitive issues that have restricted investment in the Canadian auto industry.

The new U.S.-MexicoCanada Agreement, or USMCA, removes the threat of damaging auto tariffs and requires 75 per cent of vehicle content be made in North America, up from 62.5 per cent currently.

This marks the first trade deal between major auto producing nations since the original 1994 North American Free Trade Agreement that will see regional vehicle content increase, said Flavio Volpe, president of Canada’s Automotive Parts Manufacturers’ Association.

“This achievement benefits Canada immediately and directly in the automotive sector,” Volpe said.

“It’s going to result in more investment, more volume purchases from existing investment and underpins the kind of jobs that we want in this country.”

Auto suppliers jumped on the news, with Martinrea International Inc. up 11 per cent on Monday at 11:20 a.m. in Toronto.

U.S. President Donald Trump had repeatedly threatened to impose tariffs on Canadian autos and auto parts if a new trade deal couldn’t be reached, a move that would have cost Canada 160,000 jobs, according to TD Economics.

The deal reached late Sunday ensures Canada won’t be affected by tariffs unless exports top 2.6 million units annually, well above the current level of 1.8 million.

“The auto industry should be absolutely thrilled,” Jerry Dias, national president of Unifor, the union that covers autoworkers, said in an interview on BNN Bloomberg TV.

“Today people can rest and take a big deep breath. We really are in a situation where we can attract investment.”

However, the deal doesn’t fix Canada’s awkward position as a high-cost competitor to a lower-cost U.S. and Mexico.