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Auto sector praises Ottawa’s NAFTA tact

Prime Minister Justin Trudeau, speaking at an APMA roundtable in Toronto on Monday, is being lauded by auto-industry leaders for setting the right tone for NAFTA negotiations.

Galit Rodan/THE CANADIAN PRESS

The federal government is doing the right things so far as it gears up for negotiations with the United States and Mexico on a new North American free-trade agreement, senior executives of Canada's automotive-parts makers say.

The government – and major players in the industry – are in the midst of gathering facts about the impact a new NAFTA deal, border taxes or tariffs on vehicles would have on the auto sector and that should continue, executives said after a roundtable discussion in Toronto on Monday with Prime Minister Justin Trudeau and Foreign Affairs Minister Chrystia Freeland.

"The meetings [Mr. Trudeau] had with the president and the meetings at all levels of the organization are absolutely the right ones [with] the right tone," Rob Wildeboer, executive chairman of Martinrea International Inc., said after the meeting. "I'm highly confident we're going to get the right results."

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Video: Justin Trudeau meets with auto industry members (The Canadian Press)

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Discussions on the auto industry will be a critical part of any NAFTA renegotiation – in part because three-way free trade in vehicles and parts underpins the entire industry in North America. Vehicles are assembled in each of the countries and shipped duty-free across borders while U.S., Canadian and Mexican components that go into those vehicles also enter each of the countries without tariff.

The sector also appears to be at the top of U.S. President Donald Trump's hit list after his tweets earlier this year, and during the election campaign last year, that castigated various auto makers for building assembly plants in Mexico and then planning to ship the vehicles into the U.S. market.

But the relationship between Mr. Trudeau and Mr. Trump seems to have started well with "a good first date," earlier this month when they met in Washington, said Flavio Volpe, president of the Automotive Parts Manufacturers' Association of Canada (APMA), who played host to the meeting.

The federal government has moved early to make sure Canada's views are known and "I think the language you hear out of Washington about Canada reflects the fruits of that," Mr. Volpe said.

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Mr. Trudeau told the industry leaders in a brief comment before the one-hour, closed-door meeting began that, because NAFTA matters to the auto industry, it matters to all Canadians.

"The high level of integration between our economies, particularly in the auto sector, needs to be continued and protected and recognized as a tremendous driver of jobs and opportunity on both sides of the border," he said. He refused to answer questions from the media.

Don Walker, chief executive officer of Magna International Inc., said NAFTA as a region needs to remain competitive when compared with Europe and Asia.

"If you look at NAFTA, Europe and China and the rest of Asia, we shouldn't be doing anything to damage the competitiveness of NAFTA," Mr. Walker said.

Both Magna and Martinrea have made significant investments in Mexico – and the United States – reflecting how the industry has grown since NAFTA took effect.

Global auto makers have invested billions of dollars in assembly plants in Mexico in recent years. Mexico's vehicle production has doubled to about four million units a year since 1994 and is projected to top five million by 2020.

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About the Author
Auto and Steel Industry Reporter

Greg Keenan has covered the automotive and steel industries for The Globe and Mail since 1995. He also writes about broader manufacturing trends. He is a graduate of the University of Toronto and of the University of Western Ontario School of Journalism. More

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