Automotive Products Trade Agreement

Automotive Products Trade Agreement

The Automotive Products Trade Agreement, commonly known as the Auto Pact or APTA, was an important trade agreement between Canada and the United States. It was signed by Prime Minister Lester B. Pearson and President Lyndon B. Johnson in January 1965. [http://ms.radio-canada.ca/archives/2002/en/wmv/autopact19650107et1.wmv]

It removed tariffs on cars, trucks, buses, tires, and automotive parts between the two countries, greatly benefiting the large American car makers. In exchange the big three car makers (General Motors, Ford, and Chrysler) agreed that automobile production in Canada would not fall below 1964 levels and that for every five new cars sold in Canada, three new ones would be made there.

Before the Auto Pact the North American automobile industry was highly segregated. Because of tariffs, only three percent of vehicles sold in Canada were made in the United States, but most of the parts were manufactured in the U.S. and overall Canada was in a large trade deficit with the States in the automobile sector.

The Pact saw vast and immediate changes. Canada began to produce far fewer different models of cars. Instead, much larger branch plants producing only one model for all of North America were constructed. In 1964, only seven percent of vehicles made in Canada were sent south of the border, but by 1968, this was sixty percent. By the same date, forty percent of cars purchased in Canada were now made in the United States. Overall the agreement was of great benefit to Canadian workers and consumers. The more efficient market lowered prices and the increased production created thousands of jobs and wages as the auto industry rose. Automobile and parts production quickly surpassed pulp and paper to become Canada's most important industry. The trade deficit has turned into a trade surplus worth billions of dollars annually to Canada.

At the same time there are important disadvantages to this arrangement. It left the Canadian automobile industry firmly in the hands of American corporations. Unlike, for instance, France with Citroën and Renault, Canada has no domestic car makers, despite a long history of Canadian car companies. The agreement also led to the creation of almost exclusively blue collar jobs. Administration and research and development remained in the United States. The agreement also prevents Canada from pursuing free trade in automobiles with other nations, such as Japan. The growth has also been very regionally skewed, with southern Ontario overwhelmingly being the main centre of production.

The Auto Pact was abolished in 2001 after a World Trade Organization ruling declared it illegal, though by that time the North American Free Trade Agreement (NAFTA) and other agreements had made it largely irrelevant.

References

External links

* [http://archives.cbc.ca/economy_business/trade_agreements/topics/326/ CBC Archives] A multimedia look at the Canadian auto industry before and after the trade agreement.


Wikimedia Foundation. 2010.

Игры ⚽ Нужна курсовая?

Look at other dictionaries:

  • Canada-United States Free Trade Agreement — The Free Trade Agreement (FTA) was a trade agreement signed by Canada and the United States on October 4th, 1988. The agreement, finalized by October 1987, removed several trade restrictions in stages over a ten year period, and resulted in a… …   Wikipedia

  • U.S.-Korea Free Trade Agreement — Infobox Korean name hangul = 한·미 자유 무역 협정 hanja = 韓美自由貿易協定 rr = Han Mi jayu muyeok hyeopjeong mr = Han Mi chayu muyŏk hyŏpchŏngThe U.S. Korea Free Trade Agreement (also known as KORUS FTA) is a trade agreement between the United States and the… …   Wikipedia

  • Canada-Costa Rica Free Trade Agreement — The Canada Costa Rica Free Trade Agreement (CCRFTA) is a free trade agreement between Costa Rica and Canada. It was signed on April 23, 2001 in Ottawa, Ontario, and came into effect on November 1, 2002. It is the first bilateral free trade… …   Wikipedia

  • Trade route — A trade route is a logistical network identified as a series of pathways and stoppages used for the commercial transport of cargo. Allowing goods to reach distant markets, a single trade route contains long distance arteries which may further be… …   Wikipedia

  • automotive industry — Introduction       all those companies and activities involved in the manufacture of motor vehicles, including most components, such as engines and bodies, but excluding tires, batteries, and fuel. The industry s principal products are passenger… …   Universalium

  • Automotive industry in the United States — The American automobile industry began in the 1890s and rapidly evolved into the largest automotive producer in the world through the use of mass production. The United States was the world s leader amongst motor vehicles main manufacturers many… …   Wikipedia

  • History of trade of the People's Republic of China — Trade has been a very significant factor of the People s Republic of China s economy. In the twenty five years that followed the founding of the People s Republic of China in 1949, China s trade institutions were built into a partially modern but …   Wikipedia

  • Canada — This article is about the country. For other uses, see Canada (disambiguation). Canada …   Wikipedia

  • APTA — can refer to:Trade agreements*Automotive Products Trade Agreement *Asia Pacific Trade AgreementProfessional organizations*American Public Transportation Association *American Physical Therapy AssociationPublic transportation*American Public… …   Wikipedia

  • Pacte de l'auto — Le Pacte de l auto (en anglais, Automotive Products Trade Agreement : APTA) fut un important traité commercial conclu par les États Unis et le Canada. Il fut ratifié par le premier ministre du Canada Lester B. Pearson et le président des… …   Wikipédia en Français

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”