Trade Agreement Vehicles

As a result, the WTO challenge has garnered considerable media attention across the country. Canadians were upset that not only had the Ottawa government assured the public that the country`s auto industry was compatible with the WTO agreement, but that the auto pact had a kind of sacred status among Canadians because it had guaranteed employment to thousands of workers over the years. The challenge was seen as an attack on the political autonomy of countries and many believed that there would be terrible economic consequences if the agreements were abandoned. These concerns were fuelled by North American automakers, who would be affected by changes to the auto pact. Ford Canada President Bobbie Gaunt, for example, said that the abolition of the auto pact in five years would result in the loss of 116,000 jobs and a decline in real GDP of about $10 billion. (10) Similarly, former trade negotiator Gordon Ritchie, who retained as a consultant to the three major North American automakers (General Motors (GM, DaimlerChrysler and Ford) (11), argued that any change in the status quo would undoubtedly allow Japanese and European manufacturers to gain a greater market share with overseas production over time. (12) The agreement also prevented Canada from monitoring free trade in automobiles internationally, and this North American exclusivity led Transport Canada to adopt the U.S. National Highway Traffic Safety Administration`s Federal Motor Vehicle Safety Standards (FMVSS), rather than participating in the development of an international consensus on automotive safety and emissions standards. , which is in Europe. [11] Japan and the European Communities also argued that Canada`s measures to implement the auto pact were inconsistent with the provisions of the subsidy agreement.

This agreement does not prohibit subsidies per se, but subsidies that depend on export performance. The analysis of the grant complaint was thorough, but at the same time, only one concrete finding was made against Canada. The appeal body upheld the working groups` decision and found that the ratio of production to turnover was not only a subsidy, but also dependent on export performance contrary to Article 3.1, point a), of the SCM Convention. It acknowledged that the impact of production-to-revenue requirements, which in some cases were 100:100, required a manufacturer to export motor vehicles. (26) However, contrary to MacLaren`s assurances, Japan and the European Communities filed complaints against Canada (5) against the country`s auto industry, just three years after the adoption of the new trade agreement.



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