Automotive Products Trade Agreement

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Automotive Products Trade Agreement

A 1965 treaty between Canada and the United States eliminating tariffs on motor vehicles and auto parts. Almost immediately, the agreement resulted in significantly more automotive trade. Proponents of the treaty (and free trade in general) argue the agreement created thousands of jobs in Canada while eliminating its trade deficit with the United States. Critics, however, point out that Canada's own car companies were entirely replaced by American counterparts. The World Trade Organization declared the agreement illegal in 2001, though by that time it had been largely replaced by NAFTA. It was informally called the Auto Pact and APTA.
References in periodicals archive ?
His arrest has rocked the world's largest auto pact, amid speculation it was part of a coup by forces within Nissan aimed at staving off a merger of the carmakers.
He said that Pakistan should request for managed trade in sensitive sectors on the pattern of Brazil-Argentina Auto Pact and linking tariff liberalization with investment of Pakistan Auto Policy 2016-21.
In particular, Mordue offers a detailed explanation of the forces associated with globalization that enabled foreign imports to gain greater market share in Canada by the late 1950s, and in so doing highlights the significance of international developments in hastening the Auto Pact in 1965.
The landmark U.S.-Canada Automotive Products Trade Agreement of 1965 (also known as the Auto Pact) was one of the first sectoral free trade agreements, allowing automotive vehicles and parts to move duty-free across the border.
I like the title of the panel, because I think it identifies some of the key economic timelines experienced since the Auto Pact, (3) and those same timelines that will be a challenge to us as we move forward.
The 1960s coincided with the implementation of the Kennedy Round of the General Agreement on Trade and Tariffs (GATT) and other trade deals, such as the U.S.-Canada Auto Pact. Before these agreements, tariffs were low on raw materials and high on manufactured goods.
In his Competing for Capital: Europe and North American in a Global Era, Kenneth Thomas calls the situation that prevailed in North American vis-a-vis automotive investment in the 1970s a "prisoner's dilemma." The creation of the 1965 Canada-US Auto Pact, an agreement that eradicated automotive tariff barriers in North America, unleashed a torrent of investment incentive battles between states and provinces.
Auto Pact: Creating a Borderless North American Auto Industry, 1960-1971.
As his narrative would have it, Canadian governments were acutely conscious of the limits of their influence when it came to matters of global importance to the United States or in areas dealing with US national security, but outside of these realms, successive Canadian government's were successful in wringing out US concessions important to the Canadian economy, including the implicit veto given to Canada over US wheat sales to third countries, the Auto Pact that played a large role in solving Canada's balance of payments problems, and exemptions to punitive American legislation.
Her point is that they flourished in the protected Canadian market--the Bronfmans by the fact that Canada had no prohibition to match the Volstead Act, Bata by high tariffs and Stronach by the Auto Pact and closeness to U.S.
The groundwork for this campaign was laid in the 1965 Canada-United States Automotive Agreement (commonly called the "Auto Pact"), described at the time as a "limited free trade" agreement.
Meanwhile, the real story of this era, as Donaghy sees it, is that Canada and the U.S., through GATT and the Auto Pact, crafted a new economic partnership that bound the two countries together more tightly than ever before.