The Canadian Auto Industry

Paper Summary:

This paper explains that the liberal Ontario government has developed an industrial strategy to stimulate investment to auto companies in the province. The author points out that this strategy is designed to promote competitiveness and train workers in Ontario's larger auto companies. The paper states that, instead of actually contributing to innovation or the competitiveness of the province's auto industry or to create new jobs, existing companies, like Valiant Corporation, can grab millions from the government simply by suggesting they might leave for a different jurisdiction. The author stresses that Canada does not actually compete in the global auto industry; instead, much of its auto industry is what is called "intra-corporate" trade within its branch plants associated with their much larger counterparts in the United States. The paper concludes that the main competitive threat faced by Canada is simply real competition itself within a free trade environment.

From the Paper:

"One example of this tendency can be seen in the free trade agreements that Canada has signed with the United States. In fact, these are managed or regulated trade agreements that, while they open U.S. markets to Canadian industry and vice versa, essentially protect the status quo and guard Canada against the competition of industries in Europe and Asia. Thus, in a paradoxical way, the free trade agreements such as the North American Free Trade Agreement can be seen as a competitive advantage for the Canadian auto industry in the global market as they protect this Canadian industries preferential access to its primary market while keeping the threat of foreign auto industry competition (i.e., non-North American) at a distance."

Sample of Sources Used:

• APMA. Automotive Parts Manufacturers' Association.http://www.apma.ca/client/apma/apma.nsf
• Barlow, Maude. "Global Showdown: The Future of Democracy in the Era of Economic Globalization." Canada and the New World Economic Order. Toronto: Captus Press, 2001, 389-402.
• Barrows, David and Cotsomitis, John. "Canada's Global Competitiveness." Canada and the New World Economic Order. Toronto: Captus Press, 2001, 3-33.
• Barrows, David and Cotsomitis, John. "International Trade and Investments." Canada and the New World Economic Order. Toronto: Captus Press, 2001, 144-177.
• Brean, Donald. "Canada's Economy: Structure and Performance." Canada and the New World Economic Order. Toronto: Captus Press 2001, 33-57.

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