Canadian auto sector worried by TPP agreement

Published: November 7, 2015

Updated: July 24, 2018

Author: Luke Jones

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Less than a week after Ontarian mayors voiced concerns about the TPP deal drawn up between former Prime Minister Stephen Harper and other Pacific Rim nations, the auto industry has also weighed in. Major groups within the sector are saying incoming Prime Minister, Justin Trudeau, faces a decision about what to do with the deal.

The TPP (Trans Pacific Partnership) arrangement has been described as the largest trade agreement in Canadian industry, but opponents say it will result in a significant loss of jobs as Japanese (and other nations) car companies will be able to bring their Asian manufactured parts into Canada instead of making them within the country. Asian labor is more cost effective for the brands, who until now have employed tens of thousands of workers in Canada.

“They’re going to have to take a look at this closely, see what has been negotiated and decide whether they want to pursue renegotiation of any element of the agreement,” said Mark Nantais, president of the Canadian Vehicle Manufacturers’ Association, which represents the Canadian units of the Detroit Three auto makers.

Auto parts manufacturers in Canada employ 81,000 workers, but jobs could dwindle if offshore factories are used by companies that are not based within the country.

“We got worse terms on key parts than we were originally told,” Flavio Volpe, president of Canada’s Automotive Parts Manufacturers’ Association, said Thursday.

“It’s a real exposure. Those were categories flagged by us to the government and they didn’t protect them as a priority.”

It is unclear whether Justin Trudeau is opposed to the TPP deal or for it. Either way, it is too late to back out of the October 4 agreement, but the Prime Minister can seek to make changes if he feels they are necessary. However, Trudeau has previously voiced his support of the agreement, although made it clear he was unhappy that former PM, Stephen Harper, conducted the negotiations behind closed doors.

Ontario remains concerned about several key concessions regarding the auto sector, in particular the tariff reduction schedule and the rules of origin for autos and parts,” Ontario Economic Development Minister Brad Duguid said in a statement.