Canada and Japan have agreed to additional trade rules on motor vehicle safety and environmental standards, according to a side letter tabled in the House of Commons Tuesday. The rules take effect with the rest of the Comprehensive and Progressive Trans-Pacific Partnership trade deal on Dec. 30.
Canada and Japan have agreed to additional trade rules on motor vehicle safety and environmental standards, according to a side letter tabled in the House of Commons Tuesday.
The new measures take effect with the rest of the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) trade deal on Dec. 30.
North American auto manufacturers — Fiat Chrysler, Ford and General Motors — had expressed concerns about whether the CPTPP tilts the playing field in Japan’s favour. Even after the text was signed, the Canadian government continued negotiating to try to address their concerns.
It’s not clear that this side letter, dated Nov. 29, resolves their issues.
“We expect full and reciprocal market access,” said Mark Nantais, president of the Canadian Vehicle Manufacturers Association (CVMA) representing these automakers. “Thus far, we haven’t seen that.”
When CPTPP takes effect, Canada will begin to eliminate its 6.1 per cent tariff on car imports from Japan and the other countries that have ratified the agreement. (Eleven countries signed the CPTPP, but only seven — including Canada and Japan — have ratified it so far and are now ready to start cutting tariffs.)
For Japanese vehicle brands not currently manufactured in Canada, the CVMA estimates that some $300-400 million in annual tariffs could be avoided once Canada’s tariff is fully phased out over four years.
In theory, that could make cars like Mazdas or Subarus cheaper here — assuming the savings are passed on to consumers and not reinvested elsewhere by the companies.
About 25 per cent of the Japanese branded vehicles sold in Canada are imports. But according to the Japanese Automobile Manufacturers of Canada (JAMA), imports represent about half of the 100 models available, including the “next generation” hi-tech vehicles that may use greener power sources (electric, fuel cell or hybrid) or more artificial intelligence than Canadian-made vehicles.
