Competition Not Protection For U.S. Automakers in Canada

Competition not protection for Automakers


http://www.thestar.com/printArticle/303443


Try harder to sell cars overseas: Emerson


TheStar.com - Business


Trade minister rejects Hargrove's demand for restrictions on imports


February 14, 2008


Richard Brennan


OTTAWA BUREAU


OTTAWA–The Big Three automakers should try harder to sell their vehicles to other countries rather than expect the federal government to put up protectionist trade barriers, International Trade Minister David Emerson says.


"But the reality is the industry has not focused on non-North American markets, whether it's Korea or any other non-North American market," Emerson said yesterday, reacting to suggestions from Canadian Auto Workers president Buzz Hargrove that Ottawa put trade restrictions on imported vehicles.


"Buzz always kind of speaks the rhetoric of free trade but when it comes right down to it, I'm not convinced he's a true free trader," Emerson told reporters.


Hargrove told a news conference on Tuesday that if reciprocal trade measures are not introduced soon, General Motors Corp. and Ford Motor Co. Ltd., particularly, could go belly up within a decade.


"What he is saying is that he wants us to negotiate access into the Korean and Japanese market for vehicles and parts and obviously that's what a free-trade negotiation is about," Emerson said. "And yet they seem to want us to walk away from the free-trade negotiations. So I'm a little puzzled by it.


"I don't think modern trade negotiations are about those kinds of deals. I don't think major economies like Japan and Korea would be interested in that kind of a deal."


Canada and the United States signed in 1965 the Automotive Products Trade Agreement, which kept Canada's auto industry healthy for 35 years. But the World Trade Organization determined in February 2000 that the Auto Pact violated international trading rules and the agreement formally came to an end in February 2001.


While Hargrove still talks about the days of the North American Auto Pact, Emerson said those days are gone.


"The Auto Pact was a very tender small step, a careful step toward North American free trade and it had built into it all kinds of production safeguards that kept it from actually being a free-trade agreement," Emerson said.


"We eventually went to free trade but that was after many, many years of people reducing their nervousness about our ability to compete in a North American market."


Emerson said North American industry exports only about one-third of 1 per cent of production, but Hargrove said that's because there is no political pressure on countries like Korea and Japan to buy vehicles made by GM, Ford and Chrysler.


"They're not exporting to any significant markets outside of North America. The Canadian auto industry is fundamentally focused on the North American market," he said.

Russian Regulatory Roulette: The Raising of Disguised Technical Barriers to Trade??

MOSCOW NEWS


Breaking Barriers

http://mnweekly.rian.ru/business/20080221/55311414.html

21/02/2008


Last Friday, Chairman of the Association of European Businesses, Reiner Hartmann, and a delegation from the AEB, held a meeting with EU Commissioner for Trade, Peter Mandelson on customs, visas, taxation and intellectual property rights issues - the four main concerns identified by European businesses operating in Russia.


Specific challenges regarding customs barriers included customs clearance procedures and different interpretations of customs regulations. A spokesperson from AEB told The Moscow News on Wednesday that "there are numerous documents that need to be provided as well as high custom costs for imports of certain goods, more particularly for cigarettes, chemicals, electronics, machine building equipment and textiles."


Concerning taxation, European businesses said they were concerned about transfer pricing, criticizing the practice of "black listing" certain countries - among others Malta and Cyprus - using the sole criterion of the tax rate applicable in that country.


According to the Draft Law on Transfer Pricing, this rate should not be less than half the tax rate applicable in the Russian Federation, which means it should not amount to less than 12 percent. The AEB stated that "a special clause of information between the countries for tax rate difference shall be introduced. However, there could be possible discrimination between EU member states." The AEB did however welcome President Vladimir Putin's recent announcement that the VAT rate will decrease significantly in coming years, which will benefit European business as well as others.


In the area of Intellectual Property Rights, difficulties abounded. In particular, representatives from pharmaceutical and agrochemical sectors reported experiencing excessive red tape and "extremely protracted and messy procedures for the registration of new products and re-registration of existing products," the AEB said.


Moreover, software manufacturers detailed barriers for importing their products into Russia. The first step entails receiving approval from the Federal Security Service (FSB) to import the software. Following approval, the Ministry of Economy issues a license to the company, but the license remains valid only for that particular shipment.


As a result, software manufacturers currently find themselves repeating the entire application process each time anew. Additional disadvantages are incurred while waiting in line for import approval: the importer must pay a service fee while customs holds the product (which on average takes three weeks), Russian authorities may keep reference samples of items used to conduct tests, and yet another fee is levied for the test analysis from an FSB-recommended lab.


The meeting served as a continuation of AEB and European Com­mission cooperation within the framework of the EU Market Access Strategy, the goal of which consists of ensuring fair trade conditions for European companies doing business not only in Russia, but any third-party state. European businesses operating in Russia will take advantage of this channel for collectively communicating their hardships on a policy level.


In order to address some of these concerns, Commissioner Mandelson emphasized the importance of feedback from European companies in offering concrete cases of discriminatory trade barriers from their experience on the ground.


AEB Chairman Reiner Hartmann indicated AEB intentions to "intensify its participation in [this] process."

By C. Anne Shupe

State of the Union address: President Bush discusses Free Trade, Protectionism and Doha

State of the Union address: President Bush discusses Free Trade, Protectionism and Doha




Excerpt from Bush's final State of the Union address - Jan. 28, 2008:


"On trade, we must trust American workers to compete with anyone in the world and empower them by opening up new markets overseas. Today, our economic growth increasingly depends on our ability to sell American goods, crops, and services all over the world. So we are working to break down barriers to trade and investment wherever we can. We are working for a successful Doha round of trade talks, and we must complete a good agreement this year. At the same time, we are pursuing opportunities to open up new markets by passing free trade agreements.


I thank the Congress for approving a good agreement with Peru. Now I ask you to approve agreements with Colombia, Panama, and South Korea. Many products from these nations now enter America duty-free, yet many of our products face steep tariffs in their markets. These agreements will level the playing field. They will give us better access to nearly 100 million customers. And they will support good jobs for the finest workers in the world: those whose products say 'Made in the USA.'


These agreements also promote America's strategic interests. The first agreement that will come before you is with Colombia, a friend of America that is confronting violence and terror and fighting drug traffickers. If we fail to pass this agreement, we will embolden the purveyors of false populism in our hemisphere. So we must come together, pass this agreement, and show our neighbors in the region that democracy leads to a better life.


Trade brings better jobs, better choices, and better prices. Yet for some Americans, trade can mean losing a job, and the Federal Government has a responsibility to help. I ask the Congress to reauthorize and reform trade adjustment assistance, so we can help these displaced workers learn new skills and find new jobs."