Latest News from the CVMA

Canadian Auto Manufacturers Call for Full Market Access in Potential Trade Agreement with South Korea.

Windsor, ON – 2007-08-08

At an automotive roundtable with members of the Liberal Party of Canada, Mark Nantais, the President of the Canadian Vehicle Manufacturers' Association (CVMA) stated “we appreciated the opportunity to discuss, with Mr. Dion and other Liberal members the challenges currently facing Canada’s auto industry, including international trade opportunities.”

“South Korea’s auto market is one of the most significant in the world,” stated Nantais. “However due to the pervasive use of tariff and non-tariff barriers by the Korean government, automotive manufacturers from around the world have been shut out of their market.”

Today, less than 5% of the 1 million vehicles sold in Korea are built in foreign countries. By comparison, over 25% of the 1.5 million vehicles sold annually in Canada are built outside the NAFTA region and a further 60% are imported from the U.S. and Mexico. Korea’s closed market has resulted in a massive trade deficit in finished vehicles with most major auto producing nations, including a $1.6 billion auto deficit with Canada annually. Despite extensive efforts by industry, only several hundred Canadian built vehicles and several thousand North American build vehicles are sold in Korea annually.

“Free trade and fair market access into auto markets globally are increasingly critical to Canada’s auto manufacturers in order to maintain high levels of plant productivity and employment. We want an FTA that allows our members and the vehicles they produce in Canada the opportunity to compete fairly in South Korea,” Nantais stated.

“Given the history of the use of market distorting and protective NTBs in Korea, the CVMA has been calling on the Federal government to negotiate an FTA that includes an immediate tariff snap-back when new Korean NTBs emerge. This important mechanism will help to permanently eliminate these market barriers,” stated Nantais. “This mechanism will create a fair trading environment for Canadian manufacturers and place the burden squarely on Korean government to open its closed market. If Korea refuses to remove its existing NTBs and continues its historical practice of restricting market access then Canada should not offer preferential market access into the Canadian automotive market.”

For further information please contact:

Mark Nantais
President
Canadian Vehicle Manufacturers' Association
416.364.9333

About the Canadian Vehicle Manufacturers’ Association

The CVMA is the national association representing Canada’s leading manufacturers of light and heavy duty vehicles. Our membership includes DaimlerChrysler Canada Inc., Ford Motor Company of Canada, Limited, General Motors of Canada Limited and International Truck & Engine Corporation Canada.

In partnership with the Government of Canada and the Government of Ontario, CVMA members have contributed over 80% of almost $10.15 billion in new automotive (parts and assembly) investment announced over the past four years. These investments involve a transition to flexible manufacturing, new advanced skills training programs, significant investments in research and development, and the implementation of leading-edge environmental technologies.

In 2006, our member companies produced over 70% of the 2.55 million light duty vehicles built in Canada and accounted for 54% of all light duty vehicles sold in Canada. Our members purchase over 80% of all automotive parts produced in Canada for vehicle production across North America.

The automotive industry has been the driving force of Canada’s economy for over 100 years.

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