TPP of dubious benefit, Canadian auto parts makers say
- December 23, 2017
Canada’s participation in a new Trans-Pacific Partnership trade deal may not bring much benefit to Canadian auto parts makers, according to a CP news story.
The article quotes Flavio Volpe, president of the Automotive Parts Manufacturers’ Association of Canada, as saying that the cost of shipping parts to Asian members of such a pact would push the price tag of Canadian parts out of reach in those markets. And Canada’s small and midsized parts makers lack the resources needed to win business and set up operations in that part of the world, he says.
Volpe says sales of Canadian-made vehicles with high Canadian parts content won’t accelerate if the TPP’s current auto rules are finalized in an 11-country agreement.
The CP story quotes from a memorandum Mr. Volpe issued to APMA members: "Furthermore, access to the low-cost supply chains of Asia on a volume basis is structurally out of reach for Canadian manufacturers and the advantage will fall solely to Asian-based assemblers of the Trans Pacific Partnership region."
Volpe and Rob Wildeboer, executive chairman of Martinrea International Inc., Canada's third-largest auto-parts maker by revenue, both argue that Canada should reach a new deal on NAFTA with the United States and Mexico before North American countries negotiate as a bloc with the other TPP countries, rather than trying to reach separate deals at the same time.