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Ottawa, December 20, 1995
1995-112
Ministers Announce Elimination of Automotive Parts Tariff, General Preferential Tariff on Vehicles from South Korea
Finance Minister Paul Martin, International Trade Minister Roy MacLaren and Industry Minister John Manley today announced that the tariff on all automotive parts used for vehicle assembly in Canada will be eliminated effective January 1, 1996.
"Eliminating the automotive parts tariff maintains the existing cost structure for parts for automotive assemblers in Canada not operating under the Auto Pact, currently Toyota Motor Manufacturing Canada Inc. and Honda of Canada Manufacturing Inc.," Minister Martin said. "In effect, this measure will maintain the status quo for auto parts imports."
Under the Canada-U.S. Free Trade Agreement and the North American Free Trade Agreement, the duty drawback and the production-based remission programs for Toyota and Honda expire on December 31, 1995.
"The government's intention in eliminating the automotive parts tariff is to prevent any erosion of the current competitiveness of non-Auto Pact auto plants in Canada," Mr. MacLaren said. "We want to ensure that Canada remains an attractive location for new automotive industry investments."
Mr. Manley added: "This measure will provide a more level playing field for all automotive assemblers which means a strong future for Canadian jobs in the auto industry."
Tariffs on vehicle imports will remain unchanged. Only members of the Auto Pact, including General Motors of Canada Ltd., Ford Motor Company of Canada Ltd., and Chrysler Canada Ltd., will continue to import vehicles duty-free as provided for in that arrangement.
The ministers also announced that the General Preferential Tariff (GPT) will be eliminated for vehicles from South Korea, also effective January 1, 1996. The lower GPT rate is extended to developing countries to help stimulate economic growth through increased trade.
South Korea has now surpassed Canada as the fifth largest automotive producer in the world. As South Korea is a major automotive competitor, preferential tariff treatment is no longer justified.
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For further information:
Patricia M. Close
Director, Tariffs Division
(613) 992-6881
Slawek Skorupinski
Director-General, Automotive Branch
Industry Canada
(613) 954-3797
Media Relations
Department of Foreign Affairs and International Trade
(613) 995-1874
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| Last Updated: 2002-11-26 |
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