The Trans Pacific Partnership (TPP) is currently being negotiated, but an unexpected deal may allow Japan to sell vehicles within the TPP that utilize parts from outside countries such as Thailand.

By Jeff Sanford

Toronto, Ontario -- August 7, 2015 -- Stephen Harper’s Conservative government is currently negotiating a free-trade deal known as the Trans-Pacific Partnership (TPP). A couple of surprise developments have slowed the negotiations--could an unexpected, last minute deal see North American flooded with cheap Asian autoparts?

Officials from countries involved in the deal have been negotiating the deal in Hawaii this past week. The trade deal would see tariffs on a range of goods dramatically reduced. But it’s not clear the deal will get done.

The Globe and Mail reported this week that Harper expected to be able to announce the deal had been signed before calling the election. But the election writ has been dropped and still there is no word about a conclusion to the talks.

Apparently, negotiations took a weird, unexpected turn this past week. Canadian negotiators were shocked to find out about an unexpected, un-communicated deal on auto parts between the US and Japan. The deal would see Japan given the right to sell vehicles within the TPP that utilize cheap parts from outside TPP signatory countries like Thailand.

Canadian negotiators seem worried that the clause could open up a pipeline that would see cheap Asian autoparts undermine the Canadian auto parts sector. Canadian and Mexican negotiators are dismayed that America is letting the traditional, coordinated North American approach to the auto sector go in favour of the direct deal with Japan. Negotiators from Japan said they assumed the Americans were keeping the Canadians up to date on the deal. Not so, according to the Canadians.

Could the North American market eventually be flooded with cheap Asian auto parts? We should find out relatively soon.

 

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