Canada auto parts makers back TPP, urge further gov't support

Tue Dec 1, 2015 5:02pm EST
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By Allison Lampert and Leah Schnurr

MONTREAL OTTAWA Dec 1 (Reuters) - Canada's Liberal government should commit to a 12-nation Pacific Rim free-trade deal inked by the country's former leaders, but it also must invest further in local auto assembly, a group representing auto-parts manufacturers said Tuesday.

The Automotive Parts Manufacturers Association said the Trans-Pacific Partnership (TPP) will lead to increased competition from low-cost rivals, but that Canada should stick with the deal struck by its former Tory government.

The Liberal government led by Prime Minister Justin Trudeau, elected in October, has said it will consult Canadians before committing to any deal.

"I don't think we have a choice," said association president Flavio Volpe in a phone interview. "We were very involved and put a lot of pressure while the negotiations were on, and that was the time to do it. But now it's closed."

While some in Canada's auto sector have worried about increased Asian imports, others such as Linamar Corp argue it could help bring in new business.

Under the North American Free Trade Agreement, a vehicle must have 62.5 percent North American content, and an auto part must contain 60 percent content, to qualify for tariff-free status. TPP would decrease that threshold to 30 percent for parts and 45 per cent for finished vehicles.

One Canadian auto union said the TPP could result in 20,000 lost jobs because it would allow automakers and auto parts makers to sell their products tariff-free, even if they outsource the majority of their content to low-cost countries.

Auto-parts makers, who met with federal International Trade Minister Chrystia Freeland and Economic Development Minister Navdeep Bains on Monday, are not looking for direct financial compensation, Volpe said.   Continued...