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Pacific trade deal bad news for metal stamping
An initial review of the full text of the Trans-Pacific Partnership has revealed at least one unpleasant surprise for Ontario’s auto supply chain, Flavio Volpe, president of the Automotive Parts Manufacturers’ Association, said Thursday.To get more news about Stamping parts, you can visit tenral.com official website.
Engine parts and bodies-in-white — complete chassis made up of dozens of unpainted and untreated metal stampings — are included in the category of auto components which will be subject to the lowest content requirement of 35 per cent.“We flagged metal stamping as a core Canadian competency (during TPP negotiations),” Volpe said. “I’m surprised it ended up in the 35-per-cent category.”
That is lower than the 40-per-cent minimum content requirement for “key” components, such as engines and transmissions.
The lower content threshold for engine parts and bodies-in-white would affect between 40 and 50 suppliers in Ontario, said Volpe, whose group represents about 243 companies.The Canadian government followed New Zealand’s lead Thursday and released the full text of the free trade deal that also includes the U.S., Japan and eight other Pacific Rim countries.If ratified, the deal would eliminate Canadian tariffs on Japanese vehicles and make it easier for manufacturers to use offshore parts in cars.
For vehicles to enter Canada tariff-free, they must have a domestic content level of at least 45 per cent— much lower than the 62 per cent requirement in NAFTA.Under the deal, Canada will phase out the 6.1 per cent import tariff on Japanese vehicles over five years, compared to a 25-year phase-out in the United States — a disparity that has upset the Canadian Vehicle Manufacturers’ Association.
Mark Nantais, president of the association, said he will be raising his group’s concerns with the new federal Liberal government. “TPP is not favourable with the auto industry and we need to look at ways to lessen the impact.”
If renegotiating the deal isn’t possible, the industry will urge Ottawa to introduce measures aimed at softening the blow on car companies, Nantais said. “This is a balancing act as to whether we can find ways to mitigate impacts or find ways to forge agreement with all parties.”