Trans-Pacific Partnership Agreement: How it could affect Canada’s Auto, Dairy Sectors

An article in Business (October 4, 2015) titled “Trans-Pacific Partnership Agreement: How it could affect Canada’s Auto, Dairy Sectors” (http://www.huffingtonpost.ca/2015/10/04/trans-pacific-partnership-agreement_n_8241614.html) describes the most sensitive issues for Canada’s auto and dairy industries in regards to the TPP agreement. Currently under NAFTA an auto part needs to contain 60% of North American content to remain duty free. Through the TPP Japan is pushing for only 30% to guarantee a tariff free movement of vehicles and auto parts across the TPP members. This proposal may cause Canadian auto parts makers to lose business to low-cost Asian producers that aren’t part of the TPP such as China and Vietnam. Also experts of the University of Windsor predict that 10,000’s of jobs in the auto sector could be at stake in Canada due to the TPP. How will Canada compensate for the unemployment rate that might increase due to the TPP agreement? What may be the optimal percentage for Canada of North American content in the auto parts industry to guarantee an internal economic equilibrium in this sector?

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