Auto Pact Presentation 3

THE CANADA THE CANADA

AND UNITED STATES AND UNITED STATES

AUTOMOTIVE PRODUCT AUTOMOTIVE PRODUCT

AGREEMENTAGREEMENT

JANUARY 16, 1965JANUARY 16, 1965

TOTO

FEBRUARY 19, 2001FEBRUARY 19, 2001

HENRY FORD OPENED FIRS T CA R M A K ING UNITHENRY FORD OPENED FIRS T CA R M A K ING UNIT

S A M M CL A UGHL IN OPENS HIS CA RM A KING CO. A ND EV ENTUA LL Y S A M M CL A UGHL IN OPENS HIS CA RM A KING CO. A ND EV ENTUA LL Y

M ERGES WITH GENERA L M OTORS .M ERGES WITH GENERA L M OTORS .

THE ROA RING 1920’s M A RKED A S UCCES S FUL Y EA R FOR THE THE ROA RING 1920’s M A RKED A S UCCES S FUL Y EA R FOR THE

A UTOM OB ILE S ECTORA UTOM OB ILE S ECTOR

1930 – THE ERA OF DIFFICULTIES B EGINS WITH THE CRA S H IN 1930 – THE ERA OF DIFFICULTIES B EGINS WITH THE CRA S H IN

S TOCK M A RKET , WHICH EFFECTED THE CA R INDUS TRY S TOCK M A RKET , WHICH EFFECTED THE CA R INDUS TRY

A UTO TRA DE DEFICIT INCREA S EDA UTO TRA DE DEFICIT INCREA S ED ..

A M ERICA CONTROLLED 90% OF THE A UTOM OB ILE INDUS TRYA M ERICA CONTROLLED 90% OF THE A UTOM OB ILE INDUS TRY

A ND CA NA DA WA NTED A S HA RE OF THE M A RKETA ND CA NA DA WA NTED A S HA RE OF THE M A RKET ..

CA NA DA HA D A S A GGING ECONOM Y A ND A M A S S IV E TRA DE CA NA DA HA D A S A GGING ECONOM Y A ND A M A S S IV E TRA DE DEFICIT.DEFICIT.

A M ERICA WA NTED CA NA DA TO REDUCE THE A UTOM OB ILEA M ERICA WA NTED CA NA DA TO REDUCE THE A UTOM OB ILE

IM PORT TA X THA T WA S 17%.IM PORT TA X THA T WA S 17%.

JA NUA RY 16, 1965, A UTO PA CT WA S S IGNED B Y THE CA NA DIA N JA NUA RY 16, 1965, A UTO PA CT WA S S IGNED B Y THE CA NA DIA N PRIM EPRIM E

M INIS TER M R. LES TER B . PEA RS ON A ND THE PRES IDENT OF M INIS TER M R. LES TER B . PEA RS ON A ND THE PRES IDENT OF UNITED UNITED

S TA TES S TA TES LY NDON B . JOHNS ON.LY NDON B . JOHNS ON.

TRA DE TA RIFFS WERE EL IM INA TED.TRA DE TA RIFFS WERE EL IM INA TED.

EV ERY CA R M A DE S HOULD HA V E A TLEA S T 60% CA NA DIA N EV ERY CA R M A DE S HOULD HA V E A TLEA S T 60% CA NA DIA N CONTENT, CONTENT,

IN PA RTSIN PA RTS A ND IN LA B OURS .A ND IN LA B OURS .

TRADE TARIFFS ELIMINATED CREATING A SINGLE NORTH AMERICAN TRADE TARIFFS ELIMINATED CREATING A SINGLE NORTH AMERICAN

MANUFACTURING MARKETS FOR AUTOMOBILES AND PARTS.MANUFACTURING MARKETS FOR AUTOMOBILES AND PARTS.

SINGLE MARKET ALLOWED RATIONALIZING OF PRODUCTS IN CANADA AND SINGLE MARKET ALLOWED RATIONALIZING OF PRODUCTS IN CANADA AND

UNITED STATES, FORMING AN INTREGRATED UNITED STATES, FORMING AN INTREGRATED PRODUCTION AND PRODUCTION AND

MARKETING SYSTEM.MARKETING SYSTEM.

LARGER AND EFFCIENT CAR MANUFACTURING PLANTS WERE BUILT, TO LARGER AND EFFCIENT CAR MANUFACTURING PLANTS WERE BUILT, TO

SERVE BOTH COUNTRIES LEADING TO EXPANDING AUTOMOTIVE SERVE BOTH COUNTRIES LEADING TO EXPANDING AUTOMOTIVE

INDUSTRIES IN CANADA. INDUSTRIES IN CANADA.

CANADIAN CONSUMERS GET A SELECTION OF CHEAPER VEHICLES.CANADIAN CONSUMERS GET A SELECTION OF CHEAPER VEHICLES.

THE AUTO PACT CONTAINED SAFEGUARDS FOR CANADA, TO THE AUTO PACT CONTAINED SAFEGUARDS FOR CANADA, TO

ENSURE THAT NORTH AMERICAN CAR MANUFACTURERS ENSURE THAT NORTH AMERICAN CAR MANUFACTURERS

CONTINUED THEIR INVESTMENT AND PRODUCTION IN THIS COUNTRY.CONTINUED THEIR INVESTMENT AND PRODUCTION IN THIS COUNTRY.

MORE JOBS CREATED. MORE JOBS CREATED.

A UTOM OB IL ES INDUS TRY FLOURIS ED WITH THE S UCCES S OFA UTOM OB IL ES INDUS TRY FLOURIS ED WITH THE S UCCES S OF

THE A UTO PA RT S ECTOR.THE A UTO PA RT S ECTOR.

JA PA NES E CO. OPEN S HOPS .JA PA NES E CO. OPEN S HOPS .

CA NA DA HA D A S HA RE OF 18% IN THE NORTH A M ERICA N A UTO CA NA DA HA D A S HA RE OF 18% IN THE NORTH A M ERICA N A UTO

INDUS TRY , COMPA RED TO 5% IN 1965. INDUS TRY , COMPA RED TO 5% IN 1965.

A REV IS ED A UTO PA CT CA M E INTO EXIS TA NCE.A REV IS ED A UTO PA CT CA M E INTO EXIS TA NCE.

JA PA N A ND OTHER M A NUFA CTURERS LOS E RIGHT TO IM PORT PA RTSJA PA N A ND OTHER M A NUFA CTURERS LOS E RIGHT TO IM PORT PA RTS

A ND V EHICLES IN CA NA DA ,UNL ES S THEY M EET THE CONDITIONS .A ND V EHICLES IN CA NA DA ,UNL ES S THEY M EET THE CONDITIONS .

HONDA A ND TOY OTA PA Y 6.1% A UTO TA RIFFS , WHILE A M ERICA NS HONDA A ND TOY OTA PA Y 6.1% A UTO TA RIFFS , WHILE A M ERICA NS

OPERA TE TA RIFF FREE.OPERA TE TA RIFF FREE.

CA NA DA , U.S . A ND M EXICO GET INTEGRA TED INTO THE” NA FTA .CA NA DA , U.S . A ND M EXICO GET INTEGRA TED INTO THE” NA FTA .

FEB RUA RY 19, 2001, “ THE A UTO PA CT DIES ” .FEB RUA RY 19, 2001, “ THE A UTO PA CT DIES ” .

THE A UTO INDUS TRY CAN NOW MOVE EFFICIENTLY WITHOUT THE THE A UTO INDUS TRY CAN NOW MOVE EFFICIENTLY WITHOUT THE

S UPPORT OF THE A UTO PACT.S UPPORT OF THE A UTO PACT.

THE U.S MANUFACTURES MORE CA RS AND PA RTS IN CA NADA , THAN THE U.S MANUFACTURES MORE CA RS AND PA RTS IN CA NADA , THAN

S TIPULATED IN THE AUTO PACT.S TIPULATED IN THE AUTO PACT.

JAPANES E AND EUROPEAN COMPANIES AGREE TO DO B US INES S DES PITEJAPANES E AND EUROPEAN COMPANIES AGREE TO DO B US INES S DES PITE

OF THE TA RIFFS . OF THE TA RIFFS .

THE PRES ENT DAY CANA DIAN A UTOMOTIV E INDUS TRY IS THE 6THTHE PRES ENT DAY CANA DIAN A UTOMOTIV E INDUS TRY IS THE 6TH

LA RGES T IN THE WORLD.LA RGES T IN THE WORLD.

IT’S A MA JOR CONTRIB UTER TO THE CANA DIAN ECONOMY ACCOUNTINGIT’S A MA JOR CONTRIB UTER TO THE CANA DIAN ECONOMY ACCOUNTING

FOR 12% OF THE MANUFACTURING GDP IN 2002. FOR 12% OF THE MANUFACTURING GDP IN 2002.