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Windsor to profit from new North American trade agreement
Dave Waddell, Windsor Star
October 1, 2018
There was excitement from both industry officials and labour Monday about what the new United States-Mexico-Canada Agreement will mean to the Canadian auto industry and automotive towns like Windsor.
“It means companies better be ready to invest in people and equipment to meet the demand,” said Flavio Volpe, president of the Automotive Parts Manufacturers Association. “There’s room for industry growth.”
“The deal is the first time in the history of trade negotiations between two auto-producing nations that they’ve raised the regional vehicle content for cars and manufacturers. It’s a significant development for auto cities like Windsor.
“Automakers are going to buying more parts and content from current suppliers (in North America). It’s going to get busy.”
Along with the retention of an independent dispute resolution process, Volpe felt the guarantees to the auto industry are the most beneficial takeaways to Canada from the negotiations.
“We manufactured 2.2 million vehicles in total in Canada last year,” said Volpe, with 1.8 million of those being shipped to the U.S.
“There’s room for industry growth.
“We’d need three new plants producing vehicles entirely exported to the U.S. to trigger the tariffs.”
Volpe said the cost of cars is likely to rise a bit, but the trade off is more economic activity and jobs in North America. That activity could be further boosted by the American threat of tariffs on those manufacturers exporting to North America, but not building here.
“That makes the idea of investing in North America a little more palatable,” Volpe said.
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Inside the USMCA deal: How homemade brisket and a last-minute concession brought relief
Tom Blackwell – Financial Post
On a pressure-filled weekend fuelled by multiple fast-food runs, it was a welcome respite.
As a small, elite team of Canadian officials huddled in the Prime Minister’s Office and negotiated what would become a new North American free trade deal, the husband of Katie Telford, Justin Trudeau’s chief of staff, came to the rescue.
Public affairs consultant Rob Silver and his son delivered homemade brisket.
“Everybody was pretty happy about having something real, rather than running out and getting coffee and donuts,” said David MacNaughton, Canada’s ambassador to the United States.
From the outside, Flavio Volpe of the Automotive Parts Manufacturers Association could sense a deal was close as calls from the Canadian team picked up pace.
“The frequency of contact, the testing of items, asking for more empirical data, really was much more than normal Friday and Saturday,” he said.
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Trump Clears Deck for China Trade War With New Nafta Deal
By Rich Miller, Andrew Mayeda , Jenny Leonard
October 1, 2018 – Bloomberg
President Donald Trump looks to be preparing for a potentially protracted economic war with China by clearing the decks of disputes with America’s other trading competitors.
In just the last few weeks, he’s struck a last-minute deal with Canada and Mexico, signed a trade agreement with South Korea and convinced Japan to begin bilateral economic negotiations. The North American accord also includes provisions seemingly aimed at keeping Chinese products out of the region.
“The U.S. seems focused on keeping Chinese imports from gaining real market share in the U.S.,” said Flavio Volpe, president of Canada’s Automotive Parts Manufacturer’s Association. “The blunt protectionist stick used by this administration may end up creating a coalition of major trading partners that will be difficult for Chinese carrots to compete with.”
New Trade Pact Spares U.S. Auto Makers From Tariffs but Adds Restrictions
By Chester Dawson and Adrienne Roberts – The Wall Street Journal
Oct. 1, 2018
DETROIT—The new trade agreement struck Sunday night between the U.S. and Canada eases uncertainty in the U.S. auto industry about the Trump administration’s trade policy, helping car manufacturers to move forward on factory investments with greater clarity.
The tentative pact, which still must be approved by Congress, spares auto makers from costly tariffs on cars imported from Canada and Mexico, a major relief for an industry that has for more than two decades relied on duty-free trade to expand operations in North America.
It is unlikely Canada will exceed its 2.6 million vehicle export threshold anytime soon, said Flavio Volpe, head of the Canadian Auto Parts Manufacturers’ Association, noting that would require the “investment equivalent of three new production plants that sell exclusively to the U.S.”
NAFTA talks in crucial phase amid threat of devastating tariffs on Canadian auto sector
Naomi Powell – Financial Post
September 29, 2018
Talks to revamp the North American Free Trade Agreement are playing out under new urgency and a familiar, if heightened threat: that U.S. President Donald Trump will cut Canada off the deal and level devastating tariffs on its auto imports.
On the other side of the table, the U.S. is under its own pressure to bring the Canadians on board amid serious doubts that a two party pact will win the support of American lawmakers – or even satisfy key terms of the agreement.
In North America’s highly integrated automotive supply chain, Canada is a key source of raw materials and parts and a crucial location for assembly, supplying about US$17 billion worth of auto parts to the U.S. and $2.5 billion to Mexico, said Flavio Volpe, president of Canada’s Automotive Parts Manufacturers’ Association (APMA). Were Canada to be cut out of the deal, those parts would become non-compliant – meaning they wouldn’t count toward the rules of origin requirement in the bilateral deal.
“So you have a current supply of $20 billion in parts that won’t apply and the number one source of aluminum in North America that won’t apply because we are NAFTA non-compliant,” said Volpe. “So it’s actually impossible to meet the current NAFTA standard without all three countries.”
At that point, some observers, including Volpe, believe U.S. lawmakers will step in to curb Trump’s power. Bown is less convinced, pointing out that Congress has yet to push back effectively against Trump’s tariffs on steel and aluminum.
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