Canada, Mexico share concerns about TPP impact to auto industry

A key point of tension in a still-uncompleted Pacific Rim trade deal has ended up putting Canada and Mexico on the same side of an argument about what is fair when it comes to the terms relating to automotive production.

Canada and Mexico are among a dozen nations involved in talks for the Trans-Pacific Partnership, a proposed trade deal involving 40 per cent of the world's economy.

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Bill Anderson of the University of Windsor's Cross-Border Institute, said the TPP brings opportunities to Canadian business that cannot be passed up — in particular the ability to reach into markets that are growing.

But the flip side of that opportunity is that these same businesses will face fiercer competition than they do right now, should Canada join the TPP.

This includes the part of the manufacturing industry that is involved in automotive and automotive part production.

"The automotive industry in Canada is a very critical industry and is not growing as quickly as people would like to see it grow and I think everybody is concerned about whether that foreign competition will be damaging," Anderson said in an interview on Tuesday.

The TPP could end up reducing the content requirements for auto parts, meaning that less of these parts would have to be manufactured in North America to avoid paying tariffs.

It's a concern that manufacturers in Mexico and Canada share, when it comes to the TPP — though some Canadian auto companies have spoken out in favour of the deal.

"Now Mexico, who a lot of people in the auto industry see as a threat to Ontario, are now sort of the ally in terms of the [TPP] negotiations," said Anderson.

Oscar Albin, the executive president of Mexico's National Autoparts Industry said Tuesday that if the content rules were amended to allow just 30 per cent of parts to come from North America, as Japan has reportedly requested, that would reduce its exports to the United States by one-third.

The TPP, which the stakeholders are trying to quickly wrap up, has become an increasingly important issue in Canada's ongoing federal election campaign.

On the campaign trail on Tuesday, Conservative Leader Stephen Harper, whose party has formed government the past three elections, said that Ottawa would "only sign a deal if we believe it's in the best interests of all of our Canadian economy, including our auto industry."

Unifor, the largest private-sector union in Canada, recently organized a series of rallies in Ontario ridings with a connection to the auto sector, in which autoworkers and their supporters demanded that Conservative candidates reveal their views on the TPP.

The union wants to see the Conservatives defeated at the polls and for the other parties to back away from any deal the union feels isn't good for the auto sector.