The TPP’s Impact on the Canadian Automotive Industry
This study examines the potential impacts of the TPP on the Canadian automotive sector. The authors analyze the TPP’s detailed provisions governing tariffs, rules of origin and regional content. Canada’s far more rapid phase-out of vehicle import tariffs will favour locating new assembly investment and reinvestment in the U.S. rather than Canada.
Meanwhile, growth in Canadian vehicle exports to markets outside North America will be limited at best. Small and medium-sized Canadian parts makers will face increased competitive pressure from parts produced in low-cost, non-TPP countries due to the TPP’s weaker rules of origin for both vehicles and parts. The study concludes that the overall consequences for automotive production and employment in Canada will likely be negative.
