The auto sector is expected to be one of the hardest hit by the TPP. Current NAFTA rules require that 62.5 per cent of auto parts come from North America. Under the TPP, autos manufactured in Canada must meet a new standard that 45% of the cost be based on parts made within the TPP. Canada called this a victory that would allow for more exports, but Unifor, the union representing Canada’s auto workers, condemned the deal as “outrageous” and warned that it will kill jobs.
Having low income countries in trade agreements means inevitable outsourcing. Why pay Canadian wages when Vietnamese can be hired for 65 cents/hour?
It is expected that over time Canadian consumers will see lower prices for vehicles since if Japan ratifies, the current 6.1-per-cent tariff on Japanese passenger vehicles will be phased out over five years. While threatening Canadian jobs, the new lower content threshold for auto parts is expected to lower consumer costs. The elimination of a wide range of tariffs should lead to more choice and lower prices for consumer goods – if Canadians can sufficiently keep jobs at home to have disposable income to buy these goods.
Canada’s government and business elite are livid over a US-Japanese deal that would undermine Canada’s privileged access to the US market under the North American Free Trade Agreement (NAFTA). The dispute could have major implications for the fate of the TPP. Over the past two decades Mexico has emerged as a major producer for the North American auto market—it is now the world’s seventh largest car maker—and is determined to increase its share of the US auto market. Canada, meanwhile, fears the further erosion of its largest manufacturing industry.” … “The Canadian ruling elite has been rattled by the US’s indifference to its interests. ” Ref
The union head at a Brampton auto plant is sounding the alarm about the newly signed Trans-Pacific Partnership, claiming it has the potential to devastate the industry in Ontario. more here