In the early 1960’s the Canadian automotive industry faced a growing crisis of a seemingly uncontrollable decline in the production and sales of American brand vehicles, which was a major industry in Southern Ontario. Several domestic and international factors had contributed to this economic crisis and the task of stabilizing it fell upon the shoulders of the federal government. Official inquiries were established and several economic policies were put into place to help remedy the situation, but it was not until the monumental passing of the Automotive Products Trade Agreement of 1965(APTA), signed by Prime Minster Lester B. Pearson and President Lyndon B. Johnson, that significant reorganization of the entire North American auto sector could take place. Commonly known as the Auto Pact, this treaty essentially allowed for the free trade of automotive products across the Canada-US border, given that certain industry requirements had been met. Through analyzing the history and the weaknesses of the Canadian automotive industry in the late 1950’s and early 1960’s, this essay will affirm that the Auto Pact was a necessary restructuring of the North American car industry that inherently benefited Canada’s continental automotive trade with the United States. The Auto Pact of 1965 was a free trade agreement that allowed for the movement of both automotive parts and finished vehicles across the border, tariff-free, under the condition that automobile production levels would not fall below 1964 levels, essentially preserving the Canadian auto industry. Prior to the agreement, the automotive manufacturing sector was in a state of uncertainty; plagued with decreasing exports and a flood of imports, both overseas and south of the border, ... ... middle of paper ... ...ada-U.S. Auto Pact of 1965: An Experiment in Selective Trade Liberalization.” Rev. ed. Paper presented at the Conference on Trade and Industrial Organization, Merida, Mexico, December 16-18, 1985. Hazledine, Tim, Ian Wigington. “Canadian Auto Policy.” Canadian Public Policy / Analyse de Politiques 13 (1987): 490-501. Reed, Beverly. Canada's car industry before the Auto Pact. Toronto: Canadian Broadcasting Corporation, 1978. Online radio clip. Pearson, Lester B. A continental auto industry. Texas: Canadian Broadcasting Corporation, 1965. Online radio clip. Thomas, Kenneth P. “Capital Mobility and Trade Policy: The Case of the Canada-US Auto Pact.” Review of International Political Economy 4 (1997): 127-153. White, Richard. Making Cars in Canada: A Brief History of the Canadian Automobile Industry 1900-1980. Ottawa: Canada Science and Technology Museum, 2007.
To begin with, the companies of USA were located in Canada, even if they are controlled by USA. “The US companies built the factories in order to avoid the tariffs when they import the wares to Canada” (Bell, 2012, para.1). In other words, as the US companies could establish many factories in Canada as well as they circumvented the importing tariffs, they could get double profits by both two advantages of setting up the branch plants. Additionally, since the branch plants, partially for automobile companies, thrived, many Canadian auto-industries lost their control. “It was in these boom years, as well, that Canadian control of the industry was lost, as the US automakers with whom the Canadians had partnere...
"Is the Auto Industry's Recovery a 'Success Story?'." Internet Wire 24 Nov. 2010. General OneFile. Web. 25 Nov. 2011.
... the American economy for trade rather than their own country. The shift to a national highway in Canada supported trade and the economy in giving motorists the ability to travel through Canada without having to leave like which had to be done in previous years.
Canada and the United States are the largest trade partners in the world. It is the result of the geographical position of two countries and the free trade between two countries. It should be a great thing for the economies of both countries, but since the North American Free Trade Agreement was signed, American businesses almost took over the Canadian economy. When the American companies started to make more business in Canada, it brought more jobs and money to the country in the short-term. But as a long-term effect Canadians became even more depended on the U.S. as the American companies started dominating Canadian companies in Canada. Also, today Canadian manufacturers have little protection from the government when ch...
Canada ruled the 20th century through science and technology and advanced more than any other country in this time period. Prime Minister Laurier was correct when he stated in his speech “that it is Canada that shall fill the 20th century.” Technology and science were one of the huge factors for Canada being a successful country compare to the world. In technology and science, there were many inventions that were developed in Canada that wowed the world and made Canada feel incredible. Even though war is sad and cruel, the crazy need to survive and the confidence to strive for success has made Canada’s technology and science advance greatly. During the near closing point of the 20th century, Canada’s environment and living is being more advanced and they are thinking about the future generations to come.
Snyder, M. (2012, January 19). 17 Facts About The Decline Of The U.S. Auto Industry That Are Almost Too Crazy To Believe. The Economic Collapse. Retrieved November 17, 2013, from http://theeconomiccollapseblog.com/archives/17-facts-about-the-decline-of-the-u-s-auto-industry-that-are-almost-too-crazy-to-believe
The United States is Canada's largest trading partner and is the largest market for Canadian goods. The Canada-U.S. Free Trade Agreement (1989) and the North American Free Trade Agreement (1994) have both been crucial to increasing market opportunities for Canadian exporters in the U.S.
Klier, Thomas H. "From Tail Fins to Hybrids: How Detroit Lost its Dominance of the U.S. Auto
The first approach of “Free Trade” came on September the 26th 1985 when Bill Mulroney, the Canadian Prime Minister and leader of the Canadian Progressive (socialist) Conservative Party met with American President Ronald Reagan to discuss the possibility of creating a free trade compact with the U.S.A. On October the 4th 1987 the essential negotiations came to a conclusion creating the first draft of a North American Free Trade Agreement. On January the 2nd 1989 America and Canada sign the first draft of a “Free Trade Agreement” creating the possibility of merging all of North America’s economies to compete in the global market. With the probability of Mexico entering the agreement and the idea of cheap labor for both Canadian and A...
Flammang, James M. 100 Years of the American Auto. Millennium ed. Lincolnwood: Publications International, 1999. Print. Quick facts
As a result of the development of self-powered automobiles and the American Interstate Highway System, the auto industry in Detroit was booming in 1932. In fact, majority of the jobs were in the manufacturing sector.
Globalization has become one of the most influential forces in the twentieth century. International integration of world views, products, trade and ideas has caused a variety of states to blur the lines of their borders and be open to an international perspective. The merger of the Europeans Union, the ASEAN group in the Pacific and NAFTA in North America is reflective of the notion of globalized trade. The North American Free Trade Agreement was the largest free trade zone in the world at its conception and set an example for the future of liberalized trade. The North American Free Trade Agreement is coming into it's twentieth anniversary on January 1st, 2014. 1 NAFTA not only sought to enhance the trade of goods and services across the borders of Canada, US and Mexico but it fostered shared interest in investment, transportation, communication, border relations, as well as environmental and labour issues. The North American Free Trade Agreement was groundbreaking because it included Mexico in the arrangement.2 Mexico was a much poorer, culturally different and protective country in comparison to the likes of Canada and the United States. Many members of the U.S Congress were against the agreement because they did not want to enter into an agreement with a country that had an authoritarian regime, human rights violations and a flawed electoral system.3 Both Canadians and Americans alike, feared that Mexico's lower wages and lax human rights laws would generate massive job losses in their respected economies. Issues of sovereignty came into play throughout discussions of the North American Free Trade Agreement in Canada. Many found issue with the fact that bureaucrats and politicians from alien countries would be making deci...
Spatz, J., & Nennenkamp, P. (2002, January). Globalization of the automotive industry-traditional locations under pressure. Retrieved January 14, 2012, from http://www.uni-kiel.de/ifw/pub/kap/2002/kap1093.pdf
8. Ingrassia, Paul J. Comeback: The Rise and Fall of the American Automobile. New York: New York, 1988
Melosi, Martin V. “The Automobile Shapes the City.” Automobiles in American Life and Society. 2004-2010. Web. 26 November 2013.