, 1 t , « ';1 , ., An Analysis of the Japanese Voluntary Export Restraint upon Automobiles to the U.S. and Canada: An investig.tion of its impacts upon International, Bilateral and Domestic Legal Fr amewor k 5 for safeguard me a sure s . by : Keiki Kimura Institute of Comparative Law McGill University Montreal, Canada Ath e sis su bm i t te d t 0 the Fa cul t Y 0 f Research in partial fulfillment of the deg ree of Haste r of Laws December 1985 Graduate Studies requirements for and the t' ..
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, 1
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,
«
';1 , .,
An Analysis of the Japanese Voluntary Export Restraint upon
Automobiles to the U.S. and Canada: An investig.tion of its
impacts upon International, Bilateral and Domestic Legal
Fr amewor k 5 for safeguard me a sure s .
by
: Keiki Kimura
Institute of Comparative Law McGill University Montreal, Canada
Ath e sis su bm i t te d t 0 the Fa cul t Y 0 f Research in partial fulfillment of the deg ree of Haste r of Laws
December 1985
Graduate Studies requirements for
and the
t' ..
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•
1
•
AB5TRACT
This study IHms, flrst of aIl, to examine various view$ , and alternatives raised in the Course of conclusion and exten-
sions of voluntary restralnt agreements for the Japanese auto-
mobIle exports to the u.s. and Canada and, secondly, to assees
l ts impacts upon legal framework of safeguard measures at
multllateral, domestlc and bilateral levels.
A frequent and widespread usage of voluntary reBtraint
agreements for a prolonged period would disrupt the safeguard
mechanism under the GATT, due highly to i~s discriminatory
nature. However, if they are instituted as the last resort
subsequant to a thorough investigation of the inJury to domes-
tlC industry and its causation by imports, it will st.abilize
the safeguard mechanism.
The incorporation of the Art. XIX of the GATT into cor-
respond ing domestic laws and the acceptance of voluntary
restraint agreement at the GATT will lessen
application of safeguard measures.
1 (
tt scr iminatory
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'Pi,r('lhes et él tprnClt lvr>e; c;nlllt>v('>pc, ,111 ,(>lIre; 'lI l,) ((' [l,
C. Framework of Analysis ....................... .
5
6
CHAPTER l Cho ice of volun tary Expor t Res tra i rit
A. United States .............................. . 8 8
11 14
1. rTC Determination ..................... .. 2. Vo 1 u nt a r y E x po r t Re s t rai n t s ........... .. 3. Local Content Bills .................... . 4. Extensions of Voluntary Export
Restraints ............................. . 20
B. Canada...................................... 30 1. Legal Steps Towards VER ...... " . . . . . . 30 2. The Auto Pact of 1965 ................... 33 3. Weather Forecasting System...... . ..... . . 37 4 . Au tomot i ve Tas k Forc~ Repor t;. .... . . . . . . . . 43 5. Extensions of the Weather Forecasting
Sys tem .................................. 52
C. Comparison of No~th American Approach to othe~s .......................... 57
CHAPTER II Impact of Voluntary Import Restrictions
A. Multilateral level (GATT) ................... 62 1. Article XIX of the GATT.......... . ....... 63 2. ProposaIs for revision ....... ~..... ...... 65
B. p Domestic level .............................. 72 1. Canada (SMIA) ........................... 72 2. The united States (Omnibus Act) ......... 76
C. Bilateral level ............................. 78 1. Treatment of Canadian
automob~le products . ....... ....... ...... 78 2. Inclusion of Japanese automobile
manufacturers lo the Auto Pact .... ...... 81 3. Treatment of non-Japanese
imported cars ................ :... ....... 84
Conclusion 86
Endnotes
B i b 1 i og r a p h Y ...•....•••...•••...•••....•••...••...•••
90
104
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LIST OF TABLES
Table l: Expor t Quo tas to the U. s. 4by Company 23
Table 2: The u.s. trade deficit with Japan 24
Table 3: Japanese Auto-plants in North AmerIca....... 28
(1) Increase value added in Canada (CVA) in each model year
by an amount equal to 60% of the growth in the value of
car sales in Canada, and 50% in the case of commercial
vehicles;
(2) make a supplementary increase ln Canadian value added of
C$260 million by the end of the 1968 model year. 84
With the passage of time, several of these provisions of
the auto-pact have become inconsequential. But of lasting
lmportance IS Annex B (1) and the first side agreement.
Because of 75% production-to-saies ratio and 60% or 50%
eVA/value of car sales ratio provisions, four American manu-
facturers are obliged, as car sales increase, ta augment
pro~_uction and investment in Canada. As eanadian content in
eanadian-made vehicles (to be above 1964 level ... Annex 8(2»)
has diminished as a result of inflation, among other factors,
the American manufacturers have come to concentrate on assemb-
ly operation ta fulfill the above two requirements. The
consequence was that Canada became a net-exporter of finished
cars and ~" <i:ven bigger net-importer of parts. 8S
The Auto Pact of 1965 did not anticipate a substantial
Inflow of automobiles from third countries into North American
!Darket. In fact, the U.S. obtained a waiver from the GATT
Contr~ctin9 Parties in 1965 50 that the U.S. did not extend
Auto Pact treatment ta third countries. 86 Canada, on the
contral"y, did not receive CI waiver, and maintained that the
Auto Pact arrangements were open to third countries if they
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.. equally fulfill requirements of the pact to establish assembly
87 plants in Canada and meet the sales/production ratio. Canada
aimed at increased domestic employment and efficiency in auto-
production by promoting foreign capital to flow Into its
territory. However, the U.S. clarified that the U.S. did not
expect third parties to base productlon in Canada and export
to the U.S. Furthermore, the U.S could deter such movement by
rejecting the entry of third parties into the list of
companies in the Auto Pact.
From the Canadian perspectIve, a substantlal inflow of
Japanese automobiles into North America has 'challenged the
Auto Pact arrangements in tw-o respects: (1) One of the basIc
arguments of the o.-s. when entering into the Auto Pact lost
its ground that there existed two separate vehicle markets,
i.e. one for vehicles produced in North Amerlca and one for
those 88 P r od u c e deI se wh e r e . ( 2) with increasing unemployment
in au tomobi le sector and populari ty for rned i um to smal1 si zed
cars from abroad, there arouse increased demands for fareign \
manufacturers to start auto-production and sourcing in the
o.S.
At the initial stage in 1981, The Canadian approach to
the surge of Japanese car imports was mostly conce r ned w i th ,
the f i r s t po i n t. This iB seen to ahift as claimed in the Task
Force Report to the second one since 1983.
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3. Weather Forecasting System
When the U.S. and Japan announced the voluntary export
restraints on May l, 1981, Canada was afraid of being isolated
by "overhead" agreements among major car-producing count-
89 r le s. ThlS was because the Canadian government correctly
assumed that the Japanese would attempt to shift their exports
from the resticted U.S. market to the unprotected Canadian
90 market. Since domestic sales lnfluence the number of cars
produced and the level of value-added ln Canada (CVA) the big
four must achleve, the Canadian government links declining
sales in Canada with a serious threat to the development of
the auto Industry. However, the assembly plants already
established ln Canada manufacture car models that are popular
ln North America at the moment (l.e., large cars, and mini-
vans), and, as a result 1 the decline of ,Canadian sales might
not immediately affect production and employment in Canada.
Nonetheless, the Canadian government recognized ovtfrall neces-
sity to find certain measures to reduce imports of cars when
the sales of imported cars increase and at the same time
domestic car sales decline.
Herb Gray, a Canadian M. P. and subsequently Minister of
Trade and Commerce representing the riding of Windsor, immedi-
ately called for similar steps on behalf of Canada to set
import -limi ta "
for Japanese automobiles. Prime Minister
Trudeau took up the matter with the th en Prime Minister of
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Japan, Suzuki who happened to be on a visit to Ottawa that
May. To follow up on the discussions, the Canadian government
quickly sent a four-man task force to Tokyo to negotiate with
the Japanese 91 government. Tanaka, then the MITI Minister,
responded that the government wou Id con tin ue to urge mode r a-
tion in its discussions with the Japanese auto makers and
would also try to convince them not to flood the Canadian
92 market with Automobiles. On June 4, 1981, the Departrnent of
Industry, Trade and Commerce, made the fol10w1ng announcement:
- The J a pan es e are i n s ti tut i n 9 a ma r k e tin 9 p r og r am for passenger vehicle exports to the Canadian market under which they have forecast that exports to Canada for the period .. April, 1981 to March 31, 1982 will not exceed 174,213 units.
- The need for a level of further restraint IS to be reviewed by Japan in consultation with Canada before the end of the Eirst year. 93
This agreement was different from the one between Japan and
the US in two ways:
(1) it uses the term, "weather forecasting" system, which is
obtained by appealing to the individua'!. automobile compa-
nies to exercise prudence in their exports and then
gathering the export plans from themi
( 2 ) it is build on a one-year basis with next year's
restraints to be determined by consultation.
As to the first point, the exercise of restriction by the
Japanese automobile companies to reduce exports to Canada
seemed to fall into ·Offences in Relation to Competition"
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stlpulated ln sectIon 32 (1) of the Combined Investigation Act
and "Conspiracy In Restraint of Trade" in section 5(2) of the
Cr iminal Code. However, a legal action can only take place
against corporations operating in Canada for agreements which
they have entered into abroad if they affect competition in
Canada. If the Japanese automobIle companies had opera ted
plants ln Canada and ordered them to reL'uce production, this
would have be~n the case. The only comment made by the
Investigation offIce under the Combines Investigation Act was
on the effects of VER on the 94
consumer welfare. Thus, the
extraterrltorlal application of the Combined Investlgation Act
was not a serlOUS threat in erectlng Import restrictions for
the Canadlan Government. This, ln turn, did not give rise to
any necesslty on the slde of Japan ta base its export
r est r a l n t son the E x po r t Con t roI Law as i n the cas e 0 f U. S .
The we a the r for e cas ti n 9 5 ys te rn , wh i ch rel i es 0 n e x po rte s t i -
mates of an individual company, sufficed.
As to the second point, the agreement was to last for one
year with the previsions for the following year to be agreed
by further consultation.' This was a different arrangement
worked out by the U.S. with Japan.
The fact that the restriction was to last only one year ,
crea ted a s~ ious conf li ct be tween Canada and J àpan ove r the
number of cars to be restricted in the second year. For a
number of reasons Canada demanded a drastic reduction in the
number of Japanese cars entering Canada. First, the Canadian
government argued that because of the depressed state of the
Canadian market, increased Japanese imports would lead to a
further drop in domestic production (with serious ramifica-
tions bet:ause of the Auto Pact agreement). Second ly, they
argued that further imports would increase the existing one-
sided deficit in auto trade with Japan. Finally, the Canadian
government objected to the ell.tremely low level of Canadian
content in Japanese vehicles.
From the Japanese point of Vlew, import reductlons, as
opposed to restrictlons, would be difflcult ta accept for the
following reasons:
(1) Japan was assured of the same level of export ta the U.S.
for the second year, if not an Increase in case the total
market sales expanded;
(2) The total trade surplus has been ln favor of Canada over
the years, so that a decrease of automobile sales will
enlarge the trade deficit for Japan in the total bilate-
raI trade. In the case of the U.S., overall trade
deficit was also on the side of U.S. so that Japan had to
take measures in one way or another to reduce i ts huge
trade surpluses. Furthermore, although Canada's auto
trade deficit with Japan nearly doubled in 1981 to a
r e cor d $1. 5 bill i on, u p f rom the pre v i 0 U s r e co r d 0 f S 8 5 6
million in 1980, Canada's auto deficits with the U.S.
($1.7 billion in 1981 and $2.0 billion in 1980) exceeded
those with Japan;
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( 3 ) Since Canada did not undertake any investigation equiva-
lent to l'll'C's inquiry into the in jury to the domestic
auto manufacturers, Canada could not justify increasing
Japanese imports, when even the reduced level of imports
by 6% in 1981 were (still) harming domestic sales of
North American cars. Given the negative determination by
rTC and the fact that the reduced sales of North American
car sin Ca nad a do es no t nec es sa r i l Y me a n the pro po r t ion -
ate decline of production in Canada, it was almost
impossible to establish the causal link;
(4) Canada provides the U.S. the duty-free entry for automo-
bile products through the Auto Pact, while Japan preferr-
ed to pay 15% dut Y since the Auto Pact i9 made in prac-
tice exclusively for American manufacturers and safeguard
measures for Canada described in Annex B are far-reaching
for Japanese manufacturers to consider new entry in such
a scale. To increase Canadian content or to set up auto
plants in Canada was not.economically feasible.
AlI these factors combined have reduced the level of
cooperative sentiments between Canada and Japan for the second
year of restrictions. In April 1982, the recession was
worsening and relations with Japan had reached an impasse1
thus the minister of Department of Industry, Trade and
Commerce, Herb Gray, ordered customs officiaIs to delay import
procedures for Japanese cars at
\ ,.
95 the poTt in Vancouver. The
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42.
exam i na t ion of one ou t of ten J apanese car s was in accordance
with the Customs and Tariff Act, but the inspectors ~ho once
only spot-checked ca r s we re r eques ted to process them in a
careful and prolonged way. A backlog of cars aboard ship and
on docks quickly built up. At its height in July, its
estimated size ranged from 15,000 to 25,000 units. Al though
the Vancouver pi1e-up was a typical example of non-tariff
barriers and was extremely detrimenta1 to the Japanese auto
manufacturers, Japan did not react with retaliation in limit-
96 ing its imports from Canada. On Aug. 11th, 1982 Inter-
national Trade Minister Edward Lumley announced that an agree-
ment had been reached with Japan under which Japan would lirnit
automobile exports to Canada to 153,000 units a year effective
f il 1 1982. 97 rom Apr st, That was down sharply from 174,213
units brought in during a trading year that ended March 31,
1982, or down of 23.5% from calendar year 1981 exports.
Presenting the fact that Japans' share of the total passenger
car market in Canada rose to 28.2% in 1981 from Just 8.7% in
two years previously, the Department of Industry, Trade and
Commerce attributed the action of Vancouver pi1e-up to a
sudden rise of the Japanese market share.
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4. Automobile Task Force Report
In r esponae to the t roubled s ta te of the Canad i an au to
industry, the Canadian government established the Federal Task
Force on the Canadian Motor Vehicle and Parts Industries
( De cern ber ' 1 9 8 2) . The Task Force was to analyze current and
future developments in the industry and rnake concrete policy
recommendations for strengthening the CaAa~ian sector.
E d wa r d Lu mIe y, Min i 5 ter 0 fIn ter na t ion aIT rad e, a p po i n te d
Partick Lavelle, President of Automotive Parts Manufacturers
Association of Canada (AMPMAC) and Robert White, Director for
Canada's United Automobile Workers Union (UAM) as co-chairmen,
and six other members arnong which three were from Canadian
aubsidiary of the Big Three, one from UAW, one from parts
industry, and the last one from Motor Vehicle Manufacturers
Association.
The report entitled: An Automotive Strategy for Canada
was submitted to Lumley in May 1983, only six months after the
formation of the Task Force. The report recommended that
Canada set rnandatory value added levels for aIl auto makers
which would be related to vehicle sales in Canada. An alter-
native for overseas auto manufacturera would be to fulfil1
auto
Ford,
pact commitmenta which were currently agreed te by GM,
98 Chrysler and A.M. The report required a 10' CVA to
cost of sales ratio plus an additional 2' CVA to cost of sales
for each l, 000 sales in excess of 3,000 uni ta up te 28,000.
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Thus, if the Japanese auto manufac,turers exported 28,000 units
to Canada, the y would have to fuI f i Il a 60% Canad ian con tent
requ i remen t. Above 28,000 units, the report recommended con-
ditional entry after negotiations with the government to ,
establish commitments comparable to the auto pact commitments . . These would include vehicle production to sales ratios and CVA
99 requirements.
Following the submission of the Task Force report, parli-
ament began consideration of legislation on a domestic content
bill. The government also began negotiations with the
Japanese ta bring about full-scale Japanese investment in
automobile plants in Canada. The report set 1987 as a target ...
year when such requirement be fulfilled by remaining vehicle
manufacturers who sell vehicles in canada. Model year 1987
requirements were as follows:
level of vehicles sold in Canada
0-3,000 units
3,000-28,000
28,000 or more unit
Requirements
Dut y as applicable
Necessary cornmitment is 10% CVA to cost of sales for each 1,000 sales in excess of 3,000 or Auto Pact tommitments (Le., a vehicle production to sales ratio and CVA of 60%)
Entry conditional on negotiations Wi~h overnment to establish commitménts comparable to the Auto Pact co ments. Thi s would include vehicle production to sales ratios and CVA.
l t ",as in the report that such measures would
force overseas producers to make job comm! tments to Canada
commen su r a te w i th the i r veh icle sale sin Canada, and ove raIl
employmen t e f fect would be mor e than 80,000 jobs, among wh i ch
43, 000 in the automotive sector, and the remaining in steel,
100 aluminum, plastics and rubber.
The composition of members was regarded as self-fulfi1l-
in9 to make recommendations inclined for the protection of
Canadian production and employment. Most observers saw the
r e sul t s 0 f the r e po r tas pre des tin e d bec a use the l n ter n a t ion a 1
Trade Minister, Ed Lumley, excluded auto-consumer associations
and neutral parties from direct participation in the task
force. Perhaps this was because Ottawa's first attempt in
1977 and 1978 to convene a task force was not much of a
success and the government did not act on the recommendations.
According to Andrei Sulzenko, a former Finance officer and a
member of Relsrnan's Report for the Canadian Automotive
Industry:
Labor movement support ls crucial for the sUccess of any goverment policy. Labor support is particularly important because labor unions experienced great disappointment wi th their participation in the previous government task force. If they (government) don' t take their advice this time, labor is every likely to reject any future task force participation and turn to non-support for the current liberal party.IOI
Y. Yamada, an executive of Nissan Automobile Company
(Canada) Ltd., agrees that understanding the position of labor
ls the key to un<3erstanding the recommendations of 'the Taak
Force:
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Canadian attitudes have changed from demanda for i ncreased sourc ing acti vit ies by the Japanese auto manufacturers to those for increased direct investment in Canada so tha t jobs w i 11 be crea ted . Jobcreation is basica1ly the central interest of the Canadian negotiation. Job creation is a1so closely related to political support f'!62 the LiberaIs in southern Ontario.
There are approximately 110,000 rnembers
46.
ln the
United Auto Worker' s Union of Canada (UAW). Among them,
80,000 work in automobile and parts manufacturing; 59,000 work
for the 'big four' auto makers: G.M., Ford, Chrysler and
American Motors and 21,000 in parts manufacturlng (usual1y
smal1er 103
cor po rat ion s) . The UAW represents mostly worke r 5
who are employed by the big four and, large si zed Ame ri can
owned parts manufacturing companies. workers in smaller
Canadian parts companies tend not ta be members of the UAW.
The principal industry interest group for parts
manufacturera ia the Automotive Parts Manufacturers AS6ocia-
tion of Canada (APMAC) , which ia comprised of approximately
350 companies, 80% of them located in Ontario. A further 10%
are located in Quebec, whi1e the remaining 10% (or less) are
located in the rest of Canada. There are, in total about
1,200 'independent' parts companies in Canada, 900 or more in
On tar io, 100 in Quebec, 100 in wes tern Canada and 3 a in the
104 Mar i times. Almost 60% of the independent part companies
are Canadian owned and over 50,000 Canadi ans ar e employed by
tl)em. There are few large sized Canadian parts rnanufactur ing
companies, but 60% of the parts industry is made up of com-
panies W1 th less than 1,000 employees,"__ Large si zed parts
companies tend to be American owned and their workers often
take part in UAW negotiations with the large auto firms.
Small and medium sized companles tend ta be Canadian owned and
about half of them are affiliated with APMAC. Together, the
UAW and APMAC ~resent a major part of auto workers in
Ontar io and also ln Canada. lOS
Ta deal with the Canadian employment issue is becoming
extremely difficult for the Japanese automobile companies
bec a use l t ha s bec 0 m e h i 9 h l Y po lit i cal and bec a use the i r
prlmary concern was on the automobile negotiation with the
o.s. According ta Yamada:
The Japan automobile Manufacturers Association (JAMA) has its main office in Washington D.C. and has none in Canada. This makes it difficult for the Japanese auto manufacturers to lobby or ta communicate effectively with the Canadian government. This ia why we are now going ta create a new wing which will run the JAMA office in Canada. We are also cooperating w i th the Canad ian Assac i a t ion of J apanese Dealers (CAJAD) ta coordinate their activities. 106
Two months before the release of the Task Force report,
SIX Canadian subsidiaries of Japanese Auto Manufacturers sub- '18
mi tted br iefs to the Motor Vehicle and Parts Industry Task
Force. Th ey bas i ca lly s tressed the follow i ng poi nts :
1. Import sales have not caused the Canadian automotive
expor ts the major i ty of i ts product ion of medi um and
large cars to the V.S. and these represent 77.8% of
total Canadian production·,
2. The Canadian automobile industry has lost Hs inter-
3.
national competit iveness in both pr ice and quallty
because of a lack of product development, decl ining
productivity, and poor cooperation between management
and labor;
The Canadian automoblle industry l S Inefflcient
because optimum decisions regarding selection of /
models and production volumes must also mee!t the
constcaints of the V.S.-Canada auto pact. 107
Anothex: major criticism on the imposition of quotas came
• from the canadian Association of Japanese Automobile Dealers
(CAJAD). The CAJAD has made public a number of ~~udies that
provide evidence disputing the utility of import quotas. One
of these ls entitled: "The Economie Effects of Trade Restric-
tians on the Importation of Japanese Cars in 108 Canada ... It
spells out six faators that account for the decline of
eeonomic activity in the Canadian auto industry in the years
from 1979 to 1982. It a1so examined quantitative1y the alleg-
ed benef i ts 'of the trade protect ion scheme proposed by the
tas k for ce repor t. The CAJAD concluded that there eould be
adverse effeets from the imposition of import restrictions on
Japanese cars. 109 The study quotes from the Japan Economie
o
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• Journal to draw attention to the feeling in Japan over
canada' s negotiating strategy to gain import reductions:
turns
We believe that Canada's action (i.e., delayed customs clearance of Japanese cars) not only runs the serious risk of violating GATT's principles but also critically damages the relations of mutual trust and confidence between Japan and Ca nad a . Wh a t we f e a r mo s t i s no t som u c h the direct adverse effects of Canada's l m po r t r est r i c t ion s but the h i g h l Y l i k eJ. y possibility of similar actions being taken by other countries, thereby fanning the fire of protectionism. Canada's action seems particularly illogical as the country is currently running a comfortable trade surplus with Japan,110
Yuzo Hatano, consul General of Japan in Toronto, also
aside Canadian complaints and criticizes the task
force's membership and report:
1. The membership composition of the task force was one-sided. There i s no way consumers could ~xpress their views nor could neutral people get involved.,
2.
3.
The task force suggests that the local content requirement will create 130,000 jobs, but this is an·~.xaggeration. It presupposes that aIl of the six Japanese auto manufacturera will produce 150,000 cars at a time when present Japanese sales in Canada are only 146,000. Furthermore, the introduc t i on of robots and other h 19h technology labor saving devices would probably lower the number of jobs that would be created by Japanese produc-tion in Canada. .
Licens ing, joint venture or sourc Ing activities are complex undertakings. The Canad i an par t s industry doea not appear ready to work wi th the Japanese
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auto maker s. When Canada went on a mission to Japan it came only to see if someone would offer a joint venture. They should have come prepared with concrete proposaIs for Japanese investment in Canada. lll
50.
Jun Sasaki, an executive with the Toronto office of the
Japan External Trade Organization (JETRO), is also critical of
Canadian demanda. He argues:
1. the Canadian government and auto ccSrporations cannat determine by themselves what i5 going to be the output of Canada 1 s automobile industry. The Canadian auto industry is a branch plant of the Amer ican automobile industrYi
2. only a portion of Canada's parts industry is Canadian owned, and this part ie generally Qot international1y compe t i t ive;
3. Canada's policy tends to be eratic. Canada'a official position differa over time and cur rently the government ia plac1ng the unemploymen tissue ahead of a 1'1 other automotive sector considerations. 112
In antic,ipation of these criticisms, especial1y regarding
Canada's international obligations, especially under the GATT,
the - Task Force report contended that their recommendations
cou Id be in Une wi th GATT pr inc iples. Two points were
s tressed:
1. The taak Force proposaI is a non-discr iminatory trade
poliey framework that requires aIl vehicie companies
selling in Canada to make similar commitments to
Canadian jobs and investment.
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2. Even if the Japanese comp1airr of the discriminatory
nature of the report, Canada cou1d argue:
(1) Japan' s automobile export restraints program to
the [est of the would is ineonsistent, varying
from one country to another and this discrimina-
tion seems to be a violation of the MFN clause
of the GATT.
(2) Japan could not r-etaliate against Canada sinee
Japan has not retaliated against any European,
South American, Southeast Asian, or other pro-
ducing country for the imposition of quotas or
local content requirements 50 that to single out
Canada for retaliation would be a violation of
MFN clause of the GATT.
(3) If exports of Japanese cars to Western Europe
were not restrained, allowing them to achieve
penetration levels similar to those they enjoy
in Canada, there shou1d be substantia11y fewer
J apanese cars flooding the Canadian market.
Th i 5 dive r s ion 0 f ve hic 1 e s cou 1 d De 9 r 0 und s for
113 a Canadian eomplaint under the GATT.
This argument entai1s two issues inherent in basic prin-
ciples of the GATT: (1) how to enforce non-discr iminatory
application of trade polieies, especially eoncerning safeguard
measures; (2) how to realize concurrent application of such ,
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8 a f e 9 ua r d me as ure B i n e a ch na t ion. One/cannot justify ones /
own policy as in accord with the GA'J"'Pt..-rules by claiming others
are adopting more stringent policies and the targeted country
has accepted such policies.
S. Extens ions of the wea ther forecast i n9 eys tem
A strong demand for legislative implementatlon of the
Task Force recommendations came from a number of quarters.
'Jntario PremIer WillIam Davis called upon the Federal govern-
ment to enact regulations requiring foreign manufècturers to
meet Canadian content quotas in the vehicles they sell in
Canada. He asserted that the continued viability of the
Canadian automotive industry could only be ensured in the
longer term by requiring aIl vehicle manufacturers sharing .the
canadian market to operate under the same requirement as those
mandated under the 1965 Canada -United States Automotive
,produets Trade 114 Agreement. In Par l iament, New Democratie
Party leader Edward Broadbent sàid the government should bring
in leg i 5 la t ion be fore the end of June 1983 tha t recogn i zed the
pr ineiples of the Task Force recommenda tions, particular ly the ,
idea that eompanies that sell vehicles in Canada should have
to invest in assembly plants and buy parts here in return for
duty-free access. 1lS
Gerald Regan, Minister of State for International Trade
told the report's proposaIs will be studied carefully. He
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mentioned that he favored incentives to encourage foreign
investment in the auto industry, but denounced content
requirements on aIl types of products, which "would go to the
absolute
116 system."
hea r t of destroylng the mut i lateral trading
Although the local content lssue was not settled in
Parllament, there existed strong sentiments that as long as
exports to th~ U.S. were being restralned, Canadian industlry
should not be left unprotected. In June, 1983, a new quota
was announced through compromise between two nations, which
restrlcted Japanese cars Imported ta Canada ta 153,000 in
1983-84 (see Table 4) .
There were voices agalnst local-content requlrements or
na J apan -Canad a Auto Pac t" sch eme . They came mainly from
e con om i s t s . For examp1es, Ross Perry, a Tor on to based
economist, did a study to determine whether the Canadian auto-
mob i le industry could r ema i n competitive in the long rune The
cone lusion he reached in his book, The future of Canada's Auto -'
Industr;t , was that it cou1d note 117 Wendy Dobson, of the C.D.
Howe Institute, analyzed the kind of adjustment which would be
nece ssar y to phase ou t uneompe t i t ive capac i ty, and pr omote
recovery by encouraging efficiency in the automobile indus-
t 118
ry. Patrick Caragata of the Canadian Chamber of Commerce
haB described the automobile industry as a sunset industry,
sugges ti ng th i sis how the J apanese gove rnmen t has t rea ted the
c:
Quotas
Market share (t)
Announcemen t Date
1981-82 (1)
174
22
June 1981
, \.
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Table 4 Export Quotas to Canada
(Apr il to Mar.ch in Thousands)
1982-83(2) 1983-84 (3) 1984-85(4) 1985-86 (5)
171 153 166 180-198 (up to 170)
21. 4 19.5 18 18%
August 1982 June 1983 June 1984 Ju1y 1985
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auto industry for the past 15 years. By setting aside short-
sighted political factors, he has tried ta understand the
current automoblle trade dispute as' a single point in the
historical development of free-trade among western industrial-
lzed countries.
In splte of such reasoned analyses by economists, the
federal government maintained the need to revitalize the auto
lndustry by encouraging the Japanese automobile and parts ,
manufacures to lnvest ln Canada. Partly due to the still high
unemployment rate ln Canada and delayed deci sions to set up
part plants in Canada by Japanese parts manufactures, the
fourth year of automobile export restraint was announced in
June 1984.
Canad i an
119 March.
This restricted Japanese auto makers to 18% of the
passenger-ca r market through to the fol1owing
Honda' 5 announcement in Apr i 1 1984 of i ts inten tion
to build a car-plant in Alliston, Ontario, which was expected
top r od u cel 0 0 , 0 0 0 car san nua II y f rom 1 9 8 6, d i d no t a lt e r the
course of negotiation over extension of Japanese export
restraints to Canada. The fa ct that Japan has extended auto-
mobile export restraints ta the U.S. has made the similar
arrangement to Canada imperative for the tourth year of re-
straints.
Entering into 1985, partly influenced by the Reagan Admi-
nistration' s move not to ask Japan to extend export restraint
of automobiles ta the U.S., the Canadian aide has also aimed
at holding down protectionist posture over export restraint
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56.
issue wi th J apan. The new Conservative government led by
Pr ime Minister Mulroney stated that Japanese car quotas have
lap~ed officially. But, he suggested that hie government
reached an understanding without formaI agreement with the
Japanese side that the Japanese automobile manufacturers would
not flood the C'lnadian market. 120 Sinclair Stevens, Federal
Minister of Regional Industrial Expansion, announced that
Japanese exports would be almost 18% of the anticipated total
Canadian car market for 1985, and that with overall Canadian
sales in 1985 predicted to be between a million or 1.1 million
cars, the Japanese could Shlp between 180,000 and 198,000 cars
to Canada without violating the ftunderstanding.ft121 De facto
e x po r t r est rai n t s are s t i Il a 1 ive wh i ch k e e p the J a pa n e se
market share at the 18% 1eve1, at least until March 1986. It
i s l i k e1 y th a t if J a pan i s t 0 ex te n d VE R t 0 the U. S. for oa e
more year, Canada would unof fic i ally reach an ag reemen t wi th
Japan for a similar arrangement as this year.
Another factor that may effect the prospect of Japan 1 s
VER to Canapa WOU1G be the start of Japanese autc.mobile pro-
duc tion in Canada. Toyota Mo~r Corp. announced in .July 1985
122 its intention to set up a car plant in Canada. Later in
Dec. 1985 Toyota made public that the plant site would be in
Cambridge, Ontario, which will have an annual output of 50,000
oars from 1988. 123 Together with Rondals Alliston plant, the
Japanese car prodùction in Canada would reach 150,000 cars a
• year trom around 1988. Given the fact that this will almost
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double the supply of Japanese-made cars in Canadian market,
there may arise sorne sentiment that calls for the continuation
o f the vol u n ta r y e x po r t ces t rai n t toC a nad a . More important-
ly 1 a major thrust of these movements by J apane se auto-
manufatures to set up auto plants in Canada together with
those in the U.S. may occur on t,he l5-year old Auto Pact
framework in North America. The inClusion of Japanese auto-
manufacturers ta the Auto Pact ma;- not be realized soon, as
wlll be discussed ln the next Chapter.
C. COMPARISON OF NORTH AKERlCAN APPROACH TO OTBÈRS
Although bath the U.S. and Canada, having an integrated
North American auto industry, have maintained a voluntary form
of impoct restrictions for five years since 1981, the legal
process differed in several 124 respects. In the U.S., in
spite of the ITC's investigation, the Congress ... as ready to
pcess the protectionist legislation. Under this situation,
both the U.S. and Japanese governments worked out together to
avoid the passage of the bills and extraterritorial applica-
tion of the U.S. antitrust, law. In contrast to this, in .~
Canada no formaI i nvest ig a t ion was ever under ta ken, nor was
protectionist legislation pending in Parliap1ent due to the
lack of law for ITC-style investigation and to the fact that
pr ivate bills are not introduced lmder the Canadian Parliamen-
tary system.
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Baving the se two cases in the U. s. and Canada, the evalu-
!tion of the voluntary form of import restrictions depends
partlyon other countries, especially, European responses to
the same question. There are two categories of nations in the
E.C., one which restrict Japanese cars and the other which
does not. The former includes ftaly, France and Britain.
The strictest case is found in Italy which keeps the
quota for Japanese cars at 2,200 a year, fixed since 1956.
Italy retained this quota on Japanese cars under Article 35 of
the GATT as a result of the agreement with Japan concluded
u po n J a pan e 5 e a c c e 5 5 ion t 0 the GA TT i n 1 9 5 5 • l 2 5 Ne x t toI ta l y
is France which is utfwilling to see the Japanese share in its
market go beyond 3%. France has maintained its limit on
Japanese automob i le E' -w:por t to Fr ance th rough informa 1 admin i-
strative measures. 126 At a le5ser level, in Britain, agree-
men t w-as reached in 1975 be tween Br i t i sh and J apanese auto
manufactuere5 to limi t Japanése car imports to about 10% of
127 the British market. The 1ates t agreement was announced in
Apr i 1 1985. between the two nations to keep the Japanese market
share to 11%.128
These quantitative restrictions are incompatible with
Articles 113 and
common comme r c i al
115 of the EEC directives
129 policy. In countries
providing for a
which did not
impose quantitative restrictions, Japanese automobile exports
expanded rapidly. For example, J apan' s share in Germany rose •
to about la' in 1980 from 5.6' in 1979. In a similar manner,
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59.
in Belgium it jumped to 28% from about 18% and in the Nether
lands to 30% from 14.5%.130
Altbough the Couneil of Ministers of the Community agreed
on the need for a wide-ranging dialogue with Japan, based on a
common strategy, Japan 1 s response was to enter into restraint
arrangement with those member states that observed free t rade
pr ineiples and did not have restt ietions on Japanese 131 car s.
The s tr ugg le by the Commi s 5 ion ta crea te a common pol icy
toward Japan and to speak for the Community was interrupted by J
an individual negotiation of member states with Japan. For
example, on his visit to Japan on June 8 to 101981, the
German Economics Minister, Count Lambsdorff, announced that
J apan of f e red to lim i t growth of ca r e xpor ts to Germany ta the
132 1980 level plus 10% growth. At a meeting of the OECD in
Paris, June 1981, Trade Minister Tanaka told Bel"gian Trade
Minister Willy Claes that shipments to Belgium and Luxembourg
in 1981 would be limited to 104,--000 cars, a drop of 7% from
1980. On a visit to Hague, he informed the Nether1and govern-
f l , 0 hO th 133 H d i B 1 men t 0 lml ts on S 1 pment ere. e announee n russe s
that sales of Japanese cars in Europe would be moderated
through a9reements with the Benelux countries and Germany and
the restr ietions imposed by the other Member States .134
Despite the Commission's' efforts to deal with Japan on
behs1f of the COlT\IJlunity, it was either through unilateral or
bi1atera1 negotiations that the automobile issue between the
Ed and J apan has been dealt with. 135 ,,J
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In comparison to the U. S. and Canada 1 the Eucopean coun-
•• tries have succeeded in keeping the Japanese market share
lower than that of North America, except for the Benelux .
countries. In terms of ways to set restrictIons, Italy and
J France practice unilatt.:'ral actions which have no equivalents
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,
in North America, · ... ij~l2 West Germany and Great Britain have
reached bilateral ~greement wlth Japan over the number of cars
to be exported to ~ach country.
For ut:her nations other than the E.C., sorne nations
retain import quotas for Japnese cars under ArtIcle 35 of the
GATT, just as Italy does, or require hl4jh local content. The
latter examples are Australla and Mexico where Japanese manu-
factures directly produce automobiles to meet local content
requirements. In Australia, vehicle producers must maintain
85\ company average local content in arder to obtain relIef
from prohibitive duties on imported 136 components. To mee t
this local content requrement, Toyota and Nissan have estab-
lished car plants. Furthermore, Mitsubishi Motor Corporation
purchased a Chrysler plant and 'Toyo Kogyo (Mazda) participated
in a joint 'Venture with Ford, thus taking over American market
share in Austral!a. In Mexico, the 1977 Automotive Decree
established two sets of local content requirements: 1) minimum
local content of 50% for cars and 65% for commercial vehicles
ta be met for each individual model of vehic1e based on compo-
nents incorporated1 and 2) recommended local content levels of
75\ for autos and 85% for commercial vehicles. The di fference
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bet.ween the recommended and minimum content must be generated
137 by e xpor ts. To meet this local content requirement, Nissan
Motor Co. has already established auto plant in Mexico.
These local content requirements seem to induce foreigr.
auto-manufaturers to set up auto plants instead of exports,
however, efficiency and competitiveness of these operations
are hlghly crltisized in the global market.
Aftcr aIl, it can be said that the global automobile
trade 15 mostly under restrlctions of one type or another. To
single out Canada as protectlonist may not be fair as the Task
Force repor t claims. Nonetheless, the se unilateral or
bllateral restrIctions of the Japanese automobile exports are
ln no way in line with the present GATT stipulations concern-
lng safeguard measures. The w ide spr ead usage of ou t-of -GATT
restr ictive measures has come to support the view that lees
stringent safeguard measures are necessary, which would enable
each nation to pursue its own industrial policy by limiting
foreign products. The question, then, is whether Ruch limita-
tions can be instituted on a non-discrirninatory basis and
across major sectors of the industry.
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CHAPTER II Impact of Voluntary Impoct Restrictions
In t h i s Cha pte r, the i m p a c t 0 f J a pan 1 s vol u n ta r y e x po r t
restraints of automobiles ta the U.S. and Canada upon legal
frameworks for safeguard measures at a) multilateral (GATT),
b) domestic and c) bilateral levels will be examined.
A. Multilateral level (GATT)
The GATT est i ma t e d i n l 9 8 2 t h a t $ 2 2 - bill i on ( U . S .) W 0 r th
of world trade was covered by restraint agreements, while only
S2-billion falls under legitimate safeguards 138 arrangements.
In the 1atest estimate by the GATT, about half of world trade
i5 under restriction or control dûe highly to the growing
usage of orde r l y make ti ng ar r angemen tB and vol un t a ry e xpor t
restraints .139 If the GATT is to remain relevant, safeguard
act ions, which now occur outside the agreement on a dlscr imi-
natory basis, need to be regularized and brought within the
140 system. The proliferation of so-called voluntary restraint
agreements and orderly marketing arrangements that exist
outside the GATT could undermine a safeguards system that lays
down that governments must prove injury and act in a non-
discriminatory fashion when they impose curbs on 141 trade. In
this section, we will assess problems in the present GATT
rules and;Procedures on safeguard measures and examine several
proposaIs for the revision of the stipulation.
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63.
1. Ar t icle XIX of the GATT
The Artlcle XIX permits governments to take emergency
measures in situations where a product 15 being imported in
such large quantities and at prices which cause or threaten
sedous in jury to domest1c production of like goods. Unde r
the present basIc princlples of the GATT such as the Most-
F a v 0 r e d - Nat ion (MF N ) cl a use ( Art. l ) and the non - dis cri m i -
natory treatment of the contracting parties (Art. XIII), the
contracting parties have to prove the existence of serious
ln]Ury and then apply protectlve measures on a non-discrimi-
natory basis to aIl nations involved. Fur thermore, unI i ke the
imposition of antl-dumping or countervailing dutles, emergency
safeguard action by a government often leads to demanda for
compen sa t ion by th e gove r nmen ts of the e xpo r t i ng coun t ri f? S
l.e., payment by way of compensatory dut y reductions on other
products of interest to those countries. If such demand B ,
where justlfIed, are not met, those countrieff are permitted to " ..
take retaliatory action by increasing rates of dut y on pro-
ducts from the country taking the safeguard action or by other ,
measures which affect its trade.
These requirements built into the existing rules and
procedures pose a serious inhibi tion upon the imposing govern-
ment. In face of domestic pressures for an Immediate relief
from imported goods and materials, the impoBing government has
to go through several steps Borne of which, as seen below, are
not yet precisely defined under the GATT stipulations:
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64.
(1) Injury test
- . '
Injlhy incurred on the domestic industry has to be
tested 1) as a "serious" in jury, 2) "caused" by imports.
Nonetheles8, the specifie standards for the former test
are not stipulated in precise amounts of import penetra-
t i on , f a lli n 9 pro fit s , p e r ce n ta 9 e 0 fun e m plo ym en t etc.,
nor for the latter standard, which requires the compa-
ri80n and weighting of the import factor with others such
as the dec1ine of productivity, change of consumer taste
and 50 142 on;
(2) Choice of measures and their duration
There is no specifie description of measures ta be
ta ken , but safeguard measures can be a surtax, import
quotas or government adjustment assistance to the indus-
try depending on the urgency and effectiveness of the
measure in eaeh occasion. Non t heles s, for the purpose of
providing a breathing period for the domestic industry ta
become able to compete \olith imports without protection,
sa fegua rd measures have to be tempor a r y, though ther e i s
no limitation agreed on the maximùm lengthi143
(3) Non-discriminatory application of safeguard measures
If safeguard action i8 takeQ, it ha~ to be directed to
aIl exporting countries concerned, eVen though the
results would be almost the same if taken against selec
tive countries,144
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(4) The right of retaliation by exporting countries
Exporting countries are entitled to retaliate against the
safeguard measures in the manner to offset the damage
145 they suffer i
Among the four points mentioned above, the tirst two are
technical matter5 and require further elaboration to bring
about a thorough Investigation in order to be able to conclude
that the application of adequate safeguard measures will help
the domestlc Industry to take a beathing Ume for adjustment.
The latter two requirements sometimes collide with political
consideratIons due to their unnecessary effects on trade rela-
tions with third countries whose exports of a product under
dispute are insignificant or rather tolerable. After aIl, the
GATT Contracting Countries tend not to invoke Art. XIX for
import relief partly due to the burden of proof and partly due
to the unnecessa r y appl i ca t ion of the me a sure to th i x;.d coun-
tries and the automatic entitlement to exporting countries of
the right to retaliate.
2. ProposaIs for revision
At the GATT meetings after the Tokyo Round, a debate
con tin u e S 0 ver the r e vis ion 0 f the Art icI e X l X 0 f the GA TT.
The difficulty lies in differing interests and dependence of
GATT contracting parties upon trade. There !re basically
three groups con tend i ng for i ts own scherne of rev i s ions for
safeguard mechanism:
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(1) The developing countries insist that the existing
MFN clause in GATT remain. It stipulates that coun-
tries must treat each other equally and not discrim-
inate against an individual exporter;
(1) V.S., Canada and Japan J)ropose consensual selectivi-
.!: lin a pp l yin 9 r est r i c t ion s t 0 0 the r e x po r tin 9 na -
tions. This would mean that an exporter would agree
to cut back the volume of his goods going lnto a
country because they were harming the receivlng
country's domestic productions;
(3) Sorne Eurpoeal"1 countries, especially France, would
like to continue to be able to take unilateral
action to protect domestic producers when neces-
146 sary. j
The firet choice i5 apparently the most liberal and
ideal, and the third choice i5 most protectionate and destruc-
tive of the free trade system. The second one i s the choice
of lesser evil and lies in the middle. The conflicts among
the three groups are repor ted to be seve r e . Agreement on
unified provisions to combat domestic protectionist measures
in order to substantiate principles of Article XIX of the
GATT, so called safeguard measures, was not reached in the
Tokyo Round, but once again fai1ed at the GATT ministerial
147 meeting in Geneva .
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Smith, deputy-representative of USTR, made clear in
June, 1985 that the U.S. woulà propose the amendment ta the
present GATT stipulation on safeguard measures sa as ta make
room for acceptance among GATT signatories of: 1) bilateral
agreements on voluntary export restraint, 2) voluntary export
r est rai n t s b y the i n dus t r yan d 3 ) e x po r t r est rai n t s t h r 0 u 9 h a
148 "weather forecasting" system. He reasoned that the present
r u les are s 0 ha r s h t h a t suc h v 01 un t a r y e x po r t r est rai n t s , li S
ln the case of the Japanese automobile êxports ta the U.S. it
becomes indispensable and that inclusion of such measures in
the GATT would ensure that in the future all restrictive trade
1 " b t d 't ti l 't' 149 po lCles e pu un er ln erna ana negotla lon.
The difficulty lles in the direction which the U.S. has
tried to move other countdes toward adopting a number of U.S.
provisions. ISO The thrust of many U.S. proposaIs is two-fold:
(1) adoption of consensual selectivity, namely a voluntary
form of restrictions and (2) application of provisions similar
to the 1974 Traàe Act, particu1arly those calling for public
hearings and other provisions. The question ar ises how these
twa proposals can be reconciled for each of them ta function
effective.ly. Voluntary export restraint alone shou1d not
replace Art. XIX of the GATT. It is rather expected that
Art. XIX keep first place as safeguarà measure with voluntary
export restraint to complement its role. 1 n th i s r e s pe ct, i t
i s cr uc i al to know how the U. S. has substan Ua te~ Ar t. XIX of
the GATT at its domestic legal framework and how, within that
framework, voluntary expert restraint can be accommodate~.
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Gray pointed out se ven features of the U.S. trade law and
its practice, other than the adjustment assitance to workers,
firms and cornrnunities, and extensive provisions setting out
procedures, including public hearings at which interested
parties may appearj 151
(1) while the 1974 Trade Act speaks of imports "in such
increased quantities," Article XIX of the GATT
(paragraph l (a» speaks of "in such increased and
under such conditions" and specifies that these two
elements must be "as a result of unforeseen develop-
mente and of the effect of the obligations incurred
by a contracting party under the GATT". Whether the
U.S. law meets aIl criteria of tt"\e GATT has to be
examined;
(2) As to the question of causality, w~at is at issue in
Art. XIX is whether there is an in jury caused by
imports and whether that in jury ia a serious in jury.
The 1974 Trade Act defines the term "substantial
cause" as ft a cause whi ch i 5 impor tan t and not less
152 than any other ,cause".
clarify the causation
adopted in Art. XIX;
This definition seems to
criterion and should be
(3) The role of procedures has So be emphas i zed. The
Trade Act makes provisions for public heatings and a
report to be issued, including a statement of the
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69.
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ratioflale for any finding and of any dissenting or
additional views. Although the Japanese automobile
case showed that these procedural safeguards were
overridden by the subsequent administrative decision
to seek export restrictions, these procedures have (l
to 'be available in domestic law, which Art. XIX
should encourage;
o (4) As to the route to higher rates, or other relief
against imports, It should go through the escape
clause of the domestic legislation, and thus through
Art. XIX. using Art. XXVIII for a nominally perma-
nent incredse in the level of a bound tar i ff should
be avoided;
(5) Section 201(a) (1) reads "a petition of eligibility
for import relief for the purpose of facilitating
orderly adjustment to import competition may be
filed " Its aim i8 to deal with "unfair"
o methods of competition and to provide 8ubsidy pro-
grams. But if this turns out for the U.S to sub-
sidize i ts weak industries in order to offset
competition from imports, it poses a perverse result
of a safeguard measures;
( 6 ) As t 0 the e x te n t 0 f 'i n dus t r y 1 0 r 1 p r od u c e ra' the
protection ia provided, Art. XIX speaka of producera
industry with imports, voluntary restraint agreement will
become the easiest way to opt out for a controlled trade to
protect domestic industries.
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2.
· . 90.
ElfDNO'l'ES
Fred Lazor. The new Protectionlsm: NC-aarr leu and The i r Ef fects on Canada, at Page. XIV (The Canad ian Institute for Economie policy, 1981)
Tbe.- Jaïan' Economie Journal, Nov. 22, 1982. The Kennedy Round rom April 1964 to July 1967 and Tokyo Round from
\ Sept. 1973 to April 1979 served as a negotiation table ) for the GATT contracting parties to reduce tarriffs. The
average tariffs of industria1ized countriea have become as low aa 4% now.
l t shou1d be noted tha t the 1970s w i tnesaed les s a progress in world trade main1y because of increased political intervention and price-setting with an eventua1 high leve1 of raw-material priee. So-called "Nixon shock" or "the Oil Crises" are the ones that triggered this movement.
3. As ear1y as in 1817, David Richard stated in his thesis of the Comparativé Production Costa that apecialization of each nation in industries whlch have lower 1evel of production costs and its participation in wor1d trade through the exchange of those goods thus produced will best serve the interests of aIl nations involved
However, this theory does not solve a var iety of problems subsequent1y arised:
(1) the discriminate incarne gains between prirnary and secondary industries;
(2) economic di stur bance of all-a t-sudden i nflow of goods which new1y gained comparative advantage,
(3) enlargemer. t of balance of paymenta between nations.
4. For instance, the French Government imposed 1) strict requirements on the use of French on import documents, 2) new rules on identifying countries of or igin for aIl goods coming into the country and 3) a ru1ing that imports of video tape recordera should be from ~ow on be c1eared through a single cuatoms office in the town of
5.
Poitiers. Globe and Mail, Nov. 20, 1982. Poitiers ie located inland away from enter ing ports. Japan entered into making wr i tten repreaentations to France under Art: XXIII of the GATT. Japan Economie Journal, Nov. 22, 1982.
John J. Ba r ce 101 III, Countervailing duties
"The Two-Traak Subsidies and Trade Retaliation·, in
1.
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91.
• Tar i ff Barr lers After the TOklo Round ed. by John Quinn' and PhIlIp slayton, at page 14 .
The meeting 1asted from Nov. 24 to 29., 1982 GATT i tself estimates that $22-bi1lion (U.S.) worth of world trade is now covered by restraint agreement, while only $2 billion falls under safeguards. Globe and Mail, Nov. 20, 1982.
7. Under the GATT, anti-dumping and counterveiling duties are legi timi zed in case of dumping and subsidy that cause or threaten mater ial i njury to an established industry (Art. VI).
The question lies in measures the contracting parties can take where no dumping nor subsidy is found. Under the present two pr inciples of GATT, one being the MostFavored-nation (MFN) clause (Art. 1) and the other nondiscriminatory treatment of the contracting parties (Art. XIII) ,the contracting parties have to prove the existence of serious in jury and then app1y protective measures on a non-discriminatory basls to aIl nations invo1ved. This requirement poses a ser ious burden on the side of imposing government in face of domestic pressure for an Immediate relief from importing goods and materials.
8. The Japan Economie Journal, Nov. 23, 1982.
9. Supra. Note 1. pp. 1-8.
10. From a speech made by Allan MacEachen at Geneva Conference. Globe and Mail, Nov. 25, 1982.
11. Report of the Federal Task Force on the Canadian Motor Vehicle and Automobile Parts Industries, An Automotive Strategy for Canada (May, 1983).
12. u.s. Trade Agreements Act of 1979, Pub. L. No. 96-39.
13. International Herald Tribune, Dec. 19, 1985.
14. Ehrenhaft, P.D. and Ward, K.I. note" prepared for In terna t iona1 20, No. 1 (Jan.) 1981~
p. 186, "In troductory Legal Materials, Vol.
15. Ibid. Section 201 (b) (4) defines "substantial cause" to Mean "a cause which is important and not less than any other" • An" importan t" cause need not be the "major cause",' but it must be "significant1y" more than a "de
_minimis" cause. The legis1ative history of Section 201 indicates that where increased imports are just one cause of many causes of equal weight, i t would be uni i kely that they would consti tute an .. important" cause, but where
---
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o
{)
o
16.
-92.
imports are one of two factors of equa1 weight, they wou1d constitute an "important" cause.
The "not 1ess th an any other" criteria is met if imports are a more important cause of in jury than any
other cause. This is satisfied if importa are one of severa1 equa1 causes of in jury and no one cause ia more important than imports. But the test is not satisfied if there is a cause of injury more important than importa. See Rodney "de C.Gray, United States Trade Polie Le 1a1ation: A Canadian View T e Inst tute for Research on PublIc policy, 1982} at pp. 20-21.
Supra. Note 14 at Unlike other
section 201 does trade practice, impor ts, alone, "important" and mentioned above.
Page 187. types of trade actions, relief under not depend upon unfair or prohibited
such as "dumping". The increase in forms the basis for r:elief if it is "not 1ess than any other causes" as
17_ Supra. note 15 Gray at page 21. Extensive provisions for adjustment assistance to
workers, firms and communities and for procedures inc1uding public hearings, these two characteristics alone, distinguish the U.S. escape clause system in the Trade Act from the legal framework for safeguard action in other jurisdictions.
18. See Chapter II, C for further discussions.
19. Supra. note 14 at pp. 188-189.
20. George Schwartz, "Auto Import Quotas: A Case Study in Protectionism", Business and Society Review (Fa11, 1981) at pag~ 65.
21. Ibid.
22. Luttre1l, C.B. "The voluntary Automobile Import Agreement wi th Japan - more protectionism, "Fed. Reserve Bank of St. Louis, vol. 63, No. 9, Nov. 81., at page 26. see table below.
1 ttl
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~-i~-:;Z~'·~' ~I '-,~~" ~- ~ . /.
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, 1 93.
Imported Cars as a Percent of Total U.S. Passenger Car Retail Sales (Thousands)
* Data are imports of assemb1ed cars and are not precise1y consistent with sales data inc1uded in first co1umn.
Source: MVMA Motor Vehic1e Facts and figures, 1981, pp. 13 and 71.
23. This view is c1ear1y stated in Amaya, N. "Rejecting Soapopera Nationa1ism" Bungeishunju Ju1y, 1981. (The article is trans1ated into English in Economie Eye, Sept. 1982) .
24. Supra. note 20, at pp. 68-69 However, administration offIcIaIs, emphasized that it wou1d be very difficu1t for President Regan to veto such 1egis1ation. Schwartz showed that the strategy of lobbying to the Congress for the coalition of companies supp1ying mater ia1s used in U. S. automobiles (AMICUS) was deve10ped by the Washington 1e9a1 firm of Collier, Shannon, Ri11 and Scott, and he conc1uded that_jt succeeded .
25. Ibid. at page 321.
26. Supra. note 23, at page 319.
27. Supra. note 23, at pp. 319-321 •
28. Supra. note 20, at page 69.
o
o
0
0
,a
, . '"
94.
29. Foreign Exchange and Foreign Trade Control Law, Law NO. 228 of 1949, as amended (1968). t
30. Matsushita, Mitsuo, "Export Control and Export Cartels in Japan". Harv. intll L.J. vol. 20, No.' 1, W 179. at page 104.
31. Ibid. at page 105. Matsushita discusses conflicting jurlsdictions between competition law and law restricting transactions. '
He presents two cases conce r ned wi th the legal i ty of export restr ictions issued under trhe Control Law and the Export Trade Control Order. For both cases, the cour ts upheld against MITI. He concludes that wi th the relaxasation of foreign exchange con troIs in Ja,pan in recent years, such controls have play,ed a decreasing role in
, 1 regulating exports. '
32. Supra., Note 15 Gray at pp. 30,:-31. From the Attorney
33.
34.
35.
36.
37.
38.
39.
40.
41.
42.
General (W.F. Smith) to USTR (W.E. Brock), the letter of February 1981 mentions, U.S. 'negotiators should emphasize the need for the foreign .gov"ernment to provide protection to i ts companies from act ions under U. S. ant i trus t laws by ordering, directing, or compelling any agreement restricting exports to the U.S. in terms as specifie as possible.
Supra. Note 23.
Fair Practices In Automotive Products Act with dissenting views (printed in Sep. 1982) at page 3.
Ibid.
Martin Anderson, "Local Content Regulation in the U.S. Auto Industry: Risks and Realities", MIT.
Ibid.
Automotive News, Aug. 16, 1982 at pp. 2 and 49. content law would not he1p U. S. Auto Industry, says."
45. Automotive News, Nov. 14, 1983, "Hurdles for imports in content 6Ill w•
46. Ibid. at page 8.
47. Ibld.
48. Automotive News, Nov. 7, 1983 at page 50 meaaure la passed by Bouse."
49. Ibid.
"local-content
50. Automotive News, Sep. 26, 1983 "Bill would put tough restrIctIons on major Japanese import lines".
51. Automotive News, Oct. 31, 1983 at page 2. year Japanese curb".
52. Ibid.
"UAW urges 2-
53. Automotive News, Jan. 23, 1984, "New Japanese quotas are llsted: Increases vary by maker."
54. Wall Street Journal, Feb. 20, 1985 "Japan's Auto Export t
Llmlt should end, Cabinet Group Formally Recommends".
55.
56.
57.
Ibid.
Wall Street Journal, Feb. 21, 1985 "Japan could 750,00 more cars ln U.S., Brock says".
Economie Journal, March 2, 1985.
58. Economie Journal, March 29, 1985.
59. d.
60. Supra. Note 58.
61. Supra. Note 58.
sell
62. International Hera1d Tribune,' Dec. 19, Glngerly Graapa the Auto-Export Nettle".
1985 "Japan
63. Ibid.
f
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o
o
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III ---- ... a,...
96 .. t
64. Supra. Note 62.
65. Automotive News, April 30, 1984 "Honda to begin engine productIon ln U.S. in 1987."
66. Japan Economic Journal, Sep. 21, 1985.
67. Automoti ve News, May 21, 1984 "N i ssan detai ls plans for Smyrna".
68. International Herald Tribune, July 24, 1985 "Toyota to set up auto plant ln U.S.; production scheduled ta start in '88".
69. Ibid.
70. Supra. Note 68.
71. Financi~l Times, July 24, 1985 "Toyota to build cars in North America. ft
72. Japan·Economic Journal, March 15, 1984.
73. International Klrald Tribune,.April t6, 1985. "Mitsubishi plans u.s. Car plant w1th Chrysler".
74. Maryann N. Keller, Economist, Dec. 16, 1985 at pp. 16-23.
75. A 1ega1 relief did not real1y exist.
76. Private bills are never adopted. Unlike the U.S., in Canada the government introduces ~egislation.
77. Carl Beigle, "The Canada-U.S. Auto Pact" at page 1. .
78. Simon Reisman, The Canadian Industr, (Oct.
79.
80.
81.
1978) at pp. 1-2. It was ue to t e ow vo ume of production for each model since Canada produced exactly the same models of cars as in the U.S.
Ibid., p. 15. The British autqmobile industry was permltted to export to Canadian market duty-free as a result of the concession granted by the Canadian Government in its agreement of 1932.
82. Canada had two other options, Inward looking -restr ic-
83.
,84.
85.
tive option and Unilateral tariff reductions -competitive option. The former choice inc1uded (1) Australian methods by which import position be improved and domestic employment increases, but higher cost~, lower waged and reduced profits are the negative impacts: and (2) Swedish methods which will promote a single Canadian producer but e1iminates constmler' s choice. The latter choice would open up markets to greater foreign competition, and in so doing be able to pursue economic mer i ts of efficiency such as 10wer costa and priees of vehic1es • But" it WaS afraid that it would lower the level of domestic production, reduce protection in jobs and aggravates balance of payment problem.
Annex B (3)-(a), it was 60\ until January l, 1968.
Dept.'\ of Industry, Trade and Commerce, "Canada-U.S. Automotive Agreement". Sept. 1982. at page 2.
Department of Industry, Trade and Commerce, "Canada-U.S. Automotive Agreement," Trade balance in automotive products were (in billions of C$): 1965, -.6J 1971, +.2J 1974, -1.9; 1976, -1; 1977, -l.lJ 1981, -1.7. See also, ITC, "Bilateral Trade in Automobile Products," in Canada's Trade Relations witb the U.S. Volume II, p. 95. It ls reported that automotlve trade figures for the first quarter of 1983 show a surplus of C$525 million and for the first half a surplus of C$1.l billion owing to the popu1ar i ty in the U. S. of car types manufactured in Canada.
92. Frank Langdon, "Japan versus the European Communityz The Automobile Crisis." Supra., note 89.
93. This represents a rollback of 6\ from the level of shipments (185,022 uni ts) of the 12 months Apr il 1980 to March 1981.
-94. Lawson Hunter, the Director of Investigation and Research for the Combines Investigation Branch of the consumer and Corporate Attairs Dept. stated in the annual report for 1983-84:
The "Volunta1Y restraint" negotiated with the Japanese Gov~hnment in 1981 resulted in higher priees for both domestic and imported cars. The quotas a1so have 1ed to long waiting 1ists and have 'created a sbortage of economy cars as Japanese manufacturers focused on more profitable exports of luxury and heavily-optioned vehicles.
He recommended that the Prospessive Conservative administration consider dropping the quotas. Ottawa Letter, Jan. 28, 1985. ,
95. ITC reasoned that the action of holding up cars on the Vancouve.r dock was necessary because the Japanese mar ket share rose from 28.2% in 1981 from 8.7% in 1979. Canada news Facts, (March 26, 1982).
96. Automotive News, Aug. 16, 1982 "Canada Customs slowdown works, Japan OKa car 1imits".
97. Department of External Affaira, Communique. (August Il, 1982). The first year agreement ran from April l, 1981 to March 31, 1982. The second year agreement shifted from this fiscal year to the calendar year, allowing 63,000 units to be imported in the period July l, 1982 to December 31, 1982. 90,000 units were imported from January 1, 1982 to June 30, 1982. Thus, the total was 153,000 uni ts in the calendar year. On a half year basis, it meant a drastic reduction of 30% in auto imports (from 90,000 to 63,000).
98. Report of the federal Task force on tbe Canadian Motor Vebicle and Automobile parts industries, An Automotive Stra tegy for Canada. (May 1983). p. 109.
99. Ibid.
100. Supra. Note 98.
101. Interview with Andrei Su1zenko (Ottawa: June 17, 1983).
---
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--
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. ,"
/
99.
\
102. Interview (by phone) with Y. Yamada (Jun~ 17,1983).
103. Figures provided by Sam Gindin (Toronto: June 10, 1983).
(UAWA) in an -i-nt"erview ~ •
,
104. Figures provided by Dennis Desrosiers (APMAC) in an interview (Toronto: June 8, 1983).
105. Supra. notes 103, 104
106. Supra. note 102. \ \ .
107. Bonda Mazda, Nissan, Subaru, Suzuki and Toyota Canada, "Br ief t()l:;.1:- the Motor Vehic1e and Parts Industry Task force," (March 1983). The six factors in the dec1ine ofeeonomie activity in the Canadian auto industry (1979-1982) are: i. a--~ation of unfavorab1e events in the North American economYI ii. the I~nadian househo1d' s_ affordabi1ity problem iF\ purchasin~t nè~_Jarge earSJ iii. higher manufacturing cos~ NOrth--'Amerlca relative to Japan have reduc~arge deman~~{ IVe Caneda-u.S. energy po1icies have s~imu1ated sma-11 car sales' thus boosting Japanese market shareJ and the perceive,d higher qua1ity of Japanese cars.
108. Report prepared for CAJAD by Singer Associates (At,1gust . 1982) • --
G~9. 110.
Ibid.
Supra. Note 108 p. 28 1
.. . .. --..~ ... ~.",h.. .. ,~.-:r ... ,
11l.
112.
113.
114. -
115.
116.
117.
Interview with Yuzo Batano (Toronto: May 20, 1983).
Interview with Jun Sasaki (Toronto: May 19, 1983).
Supra. note 98.
Globe and Mail, April 25, 1983,
Globe and Mail, May 26, 1983.
Ibid.
Rosa perry, The Future of Canada' sAuto Industry: The Big· Thre. ,and the Japnese Challenge. (Canadlan Instltute for Economle pollcy, 1982).
118. Intervfew (by phone) 'with Wendy Oobson.
. -, ~ .
" -
o
o
o·
100 • .
119. Automotive News, June 18, 1984 "Canada and ~apan Agree on new quota".
120. Ottawa_Letter, April 8, 1985 "Japanese Car quotas end, but no major influx foreseen."
121. Ibid. ~ 122.- Flnancla1 Times, Ju1y 24, 1985. Toyota has a1ready com-
p1eted wheel manufacturing plant in Delta, B.C. in April 1985. Toyota invested Can$20 million and ~xpect8 tn produce 20,000 whee1s a year, using about tOo tons of Canadian aluminum, Globe and Mail, April 2, 1985.
123. Japan Economie Journal, Dec. 12, 1985.
124. , '*
There are ta1ks between the two simi1ar resu1ts against Jâpan. notion of the ft integrated" North must be joint1y protected:
nations to br In9 about This cornes from the
American industry which
"U.S. trade representatlve William Brock said the U. S. and Canada expected Japan to continue to restrain auto exports to North America to give the auto industry a break.
Brock, who me_t wi th Trade Minister Ed Lum1ey in Ottawa, said Canada and the U.S. had a community of interest, describing thè auto industries in each country as 1itera11y one market and the two men had discussed what steps shou1d be taken on Jàpnese imports." Canadian news Facts, Jan. 25, 1982.
125. Supra. note 98 at page 183.
126. Supra. note 98 at page 182.
127. Supra. note 89 at page. ~1.
î28. International Hera1d Tr ibune Apr i 1 25 '.1 1985, "Japan to retaIn Restra~nts on a~ïo exports to Britain."
129. l
Supra. note 89 at page go.
130. Supra. note 89 at pp. 83-89.
131. Supra. note, 89 at page 94.
132. Supra. note 89 at page 96.
133. Ibid.
134. Ibid.
J
-
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C
....
,
C'
. ~ \
"
l',
....
135.
136.
137 .•
138.
- 139.
140.
141-
142:
143.
144.
145.
146.
.~K~ -; " - -~~,,"---.--,...-
J 101 .
Ibid.
SUEra. note 98 at page 187.
SOEf a • note 98 at page 186. "
Globe and Mail, Nov. 20, 1982. /
JaEan Economiè Journal, Dec. 25, 1985.
Globe and Maii, NOV. 25, 1982. $i
G1ôbe and Mail, Nov. 20, 1982.
.SuEra. note 5 at-page 124.
SUEra. note 5 page 127.
SUEra. note i
5 page 123-4.
SUEra. note 5 page 123-4.
Globe and Mail, Nov. 25, 1982.
147.' Le Monde. sé1éction Hebdomadaire. No. 1778. 1982. Li opération camouflage a abouti. Les quatre-vingt-hui t participants â la session minist~rie1le du GATT, en parvenant finalement, dans la nuit du dimanche 28 au lundi 29 Novembre, à arrêter une déclaration commune, ont
\ rAussi a masquer leur di vérgences, voire à donner l' impres~ion d'un accord. fIs sauvent ainsi la face aux Amêricains, qui furent les promotions de la r~union."
148.
149.
150.
151-
152.
\ 153.
~an Economic Journal, June 25, 1985.
Ibid.
SUEra. note 15 Gray at page 19.
Supra. note 15 Gray pp. 21'-25. -
International Legal Materials, p. 193. Vol. 20, No. 20, 1 (Jan.) , 1981.
Journal, November 23, 1982, from the ~~--~~~~~~.~K~a~n-em~itsu •
154. Japan Economie Journal, Dec. 25, 1985.
155. rt Polie : an Import
~ 'l';-~
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o 1
i;;'
~~.~~:.(, ,~: ~
è •
102.
156. Globe and Mail, Nov. 26, 1982. Trudeau admited "sorne protectlonlst barr lers erected by Canada ln the case of sorne very soft industries like textiles, llke the leather Industry, 1ike c10thlng". ' He sald, adding that the U.S. has erected "much more massive" bar r 1er s than Canada to protect its textile industry. He a1so said that Canada is trying to "phase out" its protectionist pollcies, but "we can't overnight withdraw all proteciton to these particu1ar industries and still inidcate our concern for the Canadian economy." Globe and Mail. November 26, 1982.
1'57 .
158.
159.
160.
161-
162.
163.
164.
165.
166.
167.
168.
169.
Supra. Note 15 ~ray, pp. 101-114.
Supra. Note 15 Gray, pp. 95
Special Irnport Measures Act (S.C. 1983-84, C. 25)
Supra. Note 155 at page 17.
Special Irnport Measures Act, Art. 7.1 (1) and (2).
Supra. Note 15, Gray, at page 25. (,.),.,
Trade and Tariff Act of 1984 (Pub. t. 98-573)
Mitsuo, Matsushita "U.S. Trade and Customs Act of 1984 (Omnibus Act)", Kokusaishoji-homu (Journal of Int' 1. Bus. Law) Vol. 13, No. 2 (1985) pp. 128-131.
Ibid.
Ibid.
Supra. Note 15, Gray page 30.
Ibid.
Automoti ve Products 283, 79 Stat. 1016 1965-1967)
Trade Act of 1965, Pub. L. No. 89-(1965) 19 use S2001-2033 (Supp. II,
170. International 1ega1 Materia1s. at page 191.
171. Ibid.
172. Article III of Auto Act stipulates1 "The commitments made by the two Governments in this Agreement shal1 not preclude action by either Government consistent with its obligations under Part II of the GATT."
, . ,
c
r-C
-
o
; ;
103.
173. Supra. Note 170 at page 191.
174. AutQmotive News. Sep. 13, 1982. Under the original bill, local content was applied to North American market, but the bill as amended treated Canada as any other country.
-175.
176.
177.
178.
179.
Globe and Mail, June 6, 1985.
Globe and Mail, Feb. 23, 1985.
Ibid.
Canada's automotive trade surplus with the U.S.: Can$3 billion in 1982 and 1983 respectively, Can$6 billion in 1984 and an estimated Can$5 billion in 1985.
The Automotive Components Remission Program Explanatory Notes, AutomotIve Parts DivisIon, TransportatIon Industries Branch, Dept. of Industry Trade and Commerce, Revised April 1981. ,
180. Globe and Mail, April 9, 1985.
181. Globe and Mail, June 6, 1985. "
182. Hyundai announced the building of a major auto plant in the Montreal area, Que. in Aug. 1985 to begin operat ion in 1988. Financial Times Aug. 29, 1985.
Alberger, Bill, "Sorne Commenta on the Escape Clause in Light of the Automobiles Decision". National Institute on Cr i tical issues of International Trade Law,' Wash ington D.C, 1981.
Al tsu1er, A,. Ander son, M, Jones D., Roos D., and Womack J. The future of the Automobile, The MIT Press, 1984
Amaya, Naohiro, "Rejecting Soap-Opera Nationalism --A Clash between Tokyo and Washington over Japanese Auto Exports to the U.S. Market was Averted in May by a Japanese Decision to put a Temporary Lid on Car Exports," Bung~tshunju, july, 1981.
Beigie, C., "The Canada-U.S. AlIto Pact," Canadian Perspectives in Economics. Toronto: Collier-Macmillan Canada, 1972.
Brecher, Irving. Canada's Competition Policy Revisited: Some New thoughts On An Old Story. The InstItute for Research on public POlicy, 1982.
Carbaugh, Robert. "Restricting Auto Import: Factors leading to the voluntary Export Restr ictions adopted by Japan", Nevada Review of Business and Economics 5: 18-23, Winter, 1981-82.
Chayes, Ehrlich and Lowenfeld, "Bilateral adjustment of trade problems: The U.S.-Canada automobiles Products Agreement of 1965", International Legal Process: Materia1 for an Introductory Course, Vol. II, LIttle Erown & Co , 1968
GATq", The Contracting Parties to the GATT, "Canadian/Uni ted St~~es Agreement on Automotive Product" report of the w6rking party adopted on 25 March 1965 (L/2409) GATT Basic Instrument and Selected documents (B. 1. S. D), 13th Supplement, Geneva, July 1965. ~
GATT, The Contracting Parties to. the GATT, "Unite~ StatesImports of Automotivé Products", Report of working party submitted to the Council of Representatives on 19 Nov. 1965 (L/2509) B.I.S.D. 14th Supplement. Geneva, July, 1965.
GATT, The Constructing Parties to the GATT, see a1so (L/2329) B.l.S.D.
Government of Canada, Department of External Affaira, "Japaneae Motor Vehicle Expor'ts to Canada," Communigue. August Il, 1982.
Government of Canada, Department of Industry, Trade and 'Commerce, "The Auto Pact: Where to in tne 1980S?" Addreas by Herb Gray, News Re1ease, June 13, 1980.
Government of Canada, Department of Industry, Trade and Commerce, "Emerg ing Developments in canadian Industr ia1 policy and Canada' s Econoic climate." Address by Herb Gray, News Release, August 8, 1980.
Government of Canada, Department of Industry, Trade and Commerce, "The Automotive Components Remission' program: Exp1anatory Notes". April, 1981.
Government of Commerce, Re,alese,
Canada, Department of "Japanese Auto Exports
June 4, 1981.
Industry, Trade to Canada".
.nd News
Government of Canada, Department of Industry, Trade and Commerce, "VW to build parts in Canada and increase purchaae from independent Canadian Suppliers". News Release, Oeto. 5 1981.
Government of Commerce, Sep. 1982.
Canada, Department of Industry, Trade and "Canada-United States Automotive Agreement",
Government of Canada, Royal Commission on Canada-U.S. Relations, "Bilateral Trade in Automobile Products," Canada's Trade Relations with the U.S. Volume II, Ottawa: MInIstry of Supply and ServIces Canada, 1980.
Government of Canada, Senite, "Report of the Standing Sena te Committee on National Finance on GovernmenJ: Policy and' Regional Development", Sept. 1982.
Government of Canada, Statistics Canada, "Motor Vehicle Manufacturera", 1965-1982.
Government of the United State, U. S. lnt' 1 Trade Commission, ---"Automobile Trade Statiatics Series A: Motor Vehicles
1964-1980·, 1971.
',,, 1--- .~ ... ~ ,~l~:~ii
o
o
o
Il ~,"" ~" .. - "All< "" .. _. 106.
Government of the Unit~d State, U.S. Congress Joint Economio-Commission, "u.s. ·1' International Trade Commission Determination on Laek f Injury to Domestie Industr ies by the Importation of apanese Auto Imports," International Legal Materials 20:1 (January 1981).
1
Government of the' United State U.S. Congress Joint Economie Commission, "Methods of redueing U.S. Automobile Imports". ~th Corgress. 2nd Session.
rey, Rodney C. United States Trade Poliey Le%iSlation: A Canadian 'V·iew. The Institute for Researe on PublIc Pol ey, 1982,.
Honda, Mazda, Nissan, Subaru, Suzuki and Toyota Canada, "Bre~f to the Motor Vehie1e and Parts Industry Task Force" (March 1983).
Hufbauer, G.C.: Shelton Erb, J. 1 Codes and the Uncondi tiona1 pIes", Law and Po1icy in (1980): 59-93.
and Starr, H.P. "The GATT Mo~t-Favored-Nation PrinciInternational Business 12
Kirton, John. "The Polities of Bilteral Management: The Case of the Automobile Trade". International Journal, Vol. 36, No. ~, Winter 1980-81.
Langdon, Frank. "Japjnese Versus The European Community: The Automobile Crisis", Journal of European Integretion. V.5 No. 1 Fa11. 1981.
Laxer, James. "The Aftermath of the Autopact", Canadian forum. Vol. LX No. 70
jO. June-Ju1y 1980.
Lettre1, Clifton B. "The Vo1untary Automobile Import Agre.!!menb, with Japan: More Protectionism, Bul1eten of the Federal Reserve Bank of St. Louis. 63:25-30, N181.
\ Lazar, Fred. Th~\ Ne Pro ectionism---Non-Tariff Barr iers
Their Effects on Cana a, Toronto, Cana an Inst Eeonom e Po cy, 1981.
\ ,Lazer, Fred, "C~nadian Industrial Strategy: A U.S.
ment". Juoura1 of World Trade Law, Vol. May:June, 1982
or
Impedi-16:No. 3
Matsushita, M. "Export Control and Export Car~llea in Japan-, Harvard Int '1 Law JOur,a1. 20: 103-25. W'79. L,
r ''''_CT r'- ;;;..l'''''''-'''~Yu''' .. 1· ... 'l'~'i'!1Il".;"""'.··-1<,'7J\·""""V ,1-~' .. "i"" .- i ~I,.} 't? '~'. t' ~..." ...
",' l,'
t .;,
107. -
. • l
, ' ,
~ , , '.
, ,
;
"
t.
b.; " ,
~ -1 ~
Ir· ~'
(
~
Metzger, Stanley D. "Inj~ry and Market Disruption From Importa", and "Adjustment Assitance". United States International Economic Policy in an Interdependent World (W&ahington) 1_-'1971), pp. 167 and 319
Monopoli, William, "Equality before the law and Equa1 Protection of the law". Cross-National Perspectives, 1977.
i il Ohsima, Keichi and McCravc~en, P.W. (ed.)
Joint U.S.-Japan Automotive Study. unIversIty of MIchIgan, 1989.
Technova Inc. & The
Okuma Tadayuki, "Canada-U.S. Automotive Agreement: Canadian Nationalism and American Investment". The Annual Review of Canadian Studies. Vol. 1. 1979.
ouinn, John and Slayton, Philip (ed.) Non-Tariff Barriers After The Tokyo Round. The Insti tu te for Research on PublIc polIcy, 1982.
Perry, Ross, The Future of Canada's Auto Industry: The Big Three and Japanese Challenge Canadian Institute for Economic POllcy, 1982.
Reisman, Simon (Commissioner), The Canadian Automotive Indus-try: Performance and d Proposals for Progress. Ottawa: Ministry of Supply and servIces Canada, 1978.
, \
Report of the F~deral Task Force on the Canadian Motor Vehicle and Automobile Parts Industries, An Autmotive strategy for Canada, (May 1983).
Schwartz, George, "Auto Import Ouotas: A Case Study in Protectionism," Business and Society Review (Fall, 1981).
"Should the U.S. limit imports of foreign cars", American Legal Magazine. l09:10·N'80.