The Globe and Mail reports in its Tuesday, Oct. 6, edition that the Trans-Pacific Partnership further opens up the Canadian car market, with a
6.1-per-cent Canadian tariff on imported vehicles to be phased out
over five years. A Globe editorial reports that the minimum amount of domestic content
that must be included in a car will be reduced from the 60-per-cent
limit under NAFTA.
The TPP makes the car trade a bit freer, but it does not appear to
do anything about the most distortionary aspect of the business,
that governments around the world, particularly the United States, regularly
dangle massive subsidies in front of car plants. The TPP's trade liberalization, The Globe suggests,
could even herald the start of a subsidy war. The Globe says Canadian governments,
namely Ottawa and Ontario, will be pressured to join in. All the details in the final text of the TPP deal remain to be seen. The Globe says the preliminary
verdict on the TPP should be a mildly positive one. The Globe says this is not a
radically transformative deal, nor is it a perfect deal, however, on balance,
it appears to be a good deal.
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