Auto sec­tor in the bal­ance

The Niagara Falls Review - - Local -

Com­ment­ing on the newly ne­go­ti­ated U.S.-Mex­ico trade deal, The Stan­dard made an un­der­state­ment when it said it leaves us mired in am­bi­gu­ity. This is ex­em­pli­fied by the au­to­mo­tive pro­vi­sions of this trade agree­ment which is ef­fec­tively a tem­plate for a North Amer­i­can agree­ment.

The agree­ment con­tains a 75 per cent con­tent pro­vi­sion, re­plac­ing the 62.5 per cent North Amer­i­can con­tent pro­vi­sion in NAFTA.

The es­pe­cially glar­ing am­bi­gu­ity is whether Canada can or will sign onto an agree­ment with an iden­ti­cal 75 per cent North Amer­i­can con­tent pro­vi­sion. The source of the am­bi­gu­ity lies out­side this agree­ment. It lies within pro­vi­sions of the Tran­sPa­cific Part­ner­ship (TPP) which the Trudeau gov­ern­ment has al­ready de­clared sup­port for. This is be­cause the TPP con­tra­dicts the U.S.-Mex­ico deal in­so­far as it has a far lower 45 per cent do­mes­tic au­to­mo­tive con­tent pro­vi­sion.

In view of this, there is an ob­vi­ous ques­tion. Can the Cana­dian gov­ern­ment agree to a 75 per cent con­tent rule if it is a party to the TPP with its 45 per cent rule? Logic tells you it can­not.

This cre­ates an­other ques­tion. If it isn’t pos­si­ble to rec­on­cile these pro­vi­sions, which will the Cana­dian gov­ern­ment sign on to?

These ques­tions show the Trudeau gov­ern­ment and Cana­di­ans who wel­come the U.S.-Mex­ico agree­ment ap­pear to have ma­noeu­vered them­selves into a prob­lem­atic sit­u­a­tion, where the gov­ern­ment will have to ei­ther do an about face on the TPP, or ad­here to it and re­ject a deal re­plac­ing NAFTA. The fate of what re­mains of the auto in­dus­try in Canada could be de­ter­mined by that choice.

Bruce Allen

St. Catharines

Newspapers in English

Newspapers from Canada

© PressReader. All rights reserved.