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Canada fights for Auto Pact

Broadcast Date: June 22, 1987

The Auto Pact is at the centre of the storm during the Canada-U.S. free trade negotiations in the mid-1980s. The Auto Pact helped Canada become a carmaking powerhouse so Canadians want to protect it. Not so across the border. Americans argue the Pact gives unfair advantages to Japanese and other foreign carmakers doing business in Canada. In the final agreement, the Auto Pact stays. However, there are important changes.

Japan and other foreign automakers lose the right to import parts and vehicles duty-free into Canada unless they meet the production conditions of the pact. The agreement states that for every car sold in Canada, one has to be built here. Foreign carmakers don't make enough cars in Canada to qualify for the tax break. A two-tiered auto industry emerges.

Companies such as Honda or Toyota will have to pay 6.1 per cent auto tariffs, even though some cars are built in Canada. American carmakers continue to operate tariff-free even though they now import cars and parts from overseas.

Canada fights for Auto Pact

• In 1987, Canada and United States auto trades amounted to about one-third of trade between the two countries.

Canada fights for Auto Pact

Medium: Television

Program: The National

Broadcast Date: June 22, 1987

Guest(s): Peter Murphy, David Peterson, Simon Reisman

Host: Peter Mansbridge
Reporter: Wendy Mesley

Duration: 2:53

Last updated:
April 3, 2008