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Ottawa to impose 6.1% tariff on car imports
WebPosted Fri Feb 2 15:36:18 2001
OTTAWA - In a little more than two weeks, Canada will begin imposing a 6.1 per cent tariff on all imported vehicles made by the Big Three automakers outside North America.
The tariff is being brought in to comply with a World Trade Organization ruling that Canada was violating trade rules by imposing the tariff on Japanese, Korean, and other foreign car companies, but not on foreign-made cars made by companies that were owned by GM, Ford, and DaimlerChrysler.
Under old rules in the Auto Pact, any car made by a non-Big Three subsidiary could be imported tariff-free into Canada. Other carmakers, especially the Japanese, complained that was unfair, pointing out that rule gave such foreign carmakers as Jaguar, Mercedes Benz, Volvo, Saab, and Isuzu a competitive advantage. All those car companies are now owned by the Big Three.
Japan and the EU launched a formal complaint with the WTO, saying the tariff violated fair trade rules.
The original WTO panel upheld the Japanese-EU position. It also found that the Canadian requirement that U.S. auto makers build at least as many cars in Canada as they sell, worked as an illegal export subsidy, and should be dismantled.
Canada asked the appellate body to reverse the finding concerning the most-favoured-nation clause, which obliges WTO members to grant the same trade preferences to all trading partners.
Ottawa also argued that the requirement to build cars in Canada wasn't an export subsidy.
Last May, Canada learned its appeal was unsuccessful on both counts.
So as of Feb. 19 (the day the 1965 Auto Pact expires), Canada will comply with the WTO order by imposing the 6.1 per cent tariff across the board on all imports from outside the North American Free Trade Area.
, Sat, 3 Feb 2001 11:07:40
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