Automotive News Canada - February 2021 - 16

* F E B R U A R Y 2 021

The administration of
President Joe Biden is
expected to bring more
stability to trade relations
with the United States
than there was under
Donald Trump, left. But
that doesn't mean it will
be smooth sailing for
Canadian companies.

TRADE UNDER BIDEN

PHOTOS: ISTOCK AND FILE

CANADIANS SHOULD
REMAIN ON GUARD
Expect less turmoil
but also a continued
protectionist
America-first policy
By JOHN IRWIN

AUTOMOTIVE NEWS CANADA

" nationalist attitude toward procurement, " Volpe said. " That has some
implications for fleet purchases and
manufacturing in Canada. "
Biden's plan harkens back to a similar U.S. provision during the 200809 financial crisis, when Ottawa was
forced to go through a lengthy process
to secure waivers allowing companies
to take part in the U.S. government's
federal procurement contracts.
Ottawa " has to appeal to America's
self-interest ... and make the case that
the less competitive your procurement is, probably the more costly it
might be, " said Mark Agnew, head
of international policy at
the Canadian Chamber of
Commerce.

AFTER FOUR YEARS MARKED BY
tariff threats, trade fights and vitriolic tweets from Donald Trump, the
administration of President Joe Biden
is expected to bring more stability to
trade relations with the
United States.
But those in the
Canadian auto indusTRADE DEALS
try who hope the United
States will completeOn the surface, Biden's
ly eschew protectiontrack record on trade
ism under the incoming
agreements might indiadministration are likecate that his administraly to be disappointed,
tion will favour free trade.
said Flavio Volpe, presAs a U.S. senator, he voted
ident of the Automotive
for NAFTA. As a presiParts Manufacturers'
dential candidate, he sigAssociation (APMA).
naled he would keep his
Volpe: Expects
" The Biden adminnation in the new United
President Joe Biden
istration is going to be
to continue the Trump States-Mexico-Canada
tough, " said Volpe, a freadministration's
Agreement. And Biden
" nationalist attitude
quent critic of former
was vice-president in
President Donald Trump. toward procurement.
the Obama administraThat has some
Biden's victory in
tion, which negotiated the
implications for
November's presidenTrans-Pacific Partnership
fleet purchases and
tial election was greeted
(TPP).
with relief by many in the manufacturing in
In 2017 under Trump,
Canada. " F I L E P H O T O
Canadian auto industry
the United States withwho had grown tired of
drew from the original
the uncertainty lingering over U.S.TPP free-trade agreement. Eleven
Canada trade relations. During his
nations, including Canada, Mexico,
term, Trump spurred renegotiations
Japan, Australia and Singapore, in
of the North American Free Trade
2018 signed a new agreement - the
Agreement (NAFTA) and had threatComprehensive and Progressive
ened to pull the United States out of
Agreement for the Trans-Pacific
the pact altogether. His administraPartnership (CPTPP) - whose protion imposed tariffs on Canadian aluvisions are largely identical to those
minum and steel.
of the original TPP, with a few exceptions. The CPTPP eliminates auto tar'BUY AMERICAN'
iffs among member nations, allowing
car companies and suppliers to ship
The Biden administration will pose
qualifying vehicles and parts duty free.
its own challenges for Canada. His
Biden said little about the pact
platform calls for the U.S. government
during his campaign, but in 2019 he
to spend US $400 billion ($518 billion)
promised he would renegotiate the trade
on " American products, materials and
deal before having the U.S. rejoin it.
services " over the next four years.
According to The Hill, a publication that
It's an indication that the United
covers the U.S. government, Biden said
States under Biden will retain a

then that he would bring more labour
and environmentalist voices to the negotiating table and would renegotiate the
CPTPP with the goal of holding China
" accountable. "
A concern among U.S. officials is
what they view as China's unfair practices, such as currency manipulation.
Biden echoed that theme when
speaking with reporters in November,
though he did not specifically discuss
the CPTPP.
" We need to be aligned with the
other democracies ... so that we can
set the rules of the road instead of having China and others dictate outcomes
because they are the only game in
town, " Biden said.

TPP RULES
Volpe said he expects " a serious inquiry into the U.S. rejoining
the [CPTPP], " on the condition that
labour-value content rules are revised.
The labour-content requirements are
at " untenable levels " that are " biased
toward the Asian partners in that deal, "
he said.
Volpe compared the CPTPP unfavourably to the USMCA, which raised
local-content rules and requires that
between 40 and 45 per cent of a vehicle's
content be built by workers making at
least US $16 per hour.
" The gap between the two will likely mean that Japan and the U.S. will not
come to terms on [CPTPP], but I'm not
being naive about it, " Volpe said. " Biden
was vice-president when they negotiated TPP, and layering that on TPP as an
effective China deterrent means it could
be back on the table in some way. "
The Biden administration will
have " China biases " similar to those
of the Trump administration, Volpe
said. That would have an impact on
Canadian auto suppliers sourcing subcomponents and on Canada's goal of
attracting an auto assembly plant from
a China-based automaker.
Biden in December named trade lawyer Katherine Tai as his pick for U.S.
Trade Representative. She played a key
role in negotiating stronger labour provisions with the Trump administration
in the USMCA deal.
As of press time, Tai had not been
confirmed by the U.S. Senate. - ANC
- With files from Reuters

Clearer path
forward on
fuel regs
New U.S. administration
is expected to reverse
Trump's leniency with
targets that outpace
Obama-era goals
By JOHN IRWIN

AUTOMOTIVE NEWS CANADA

JOE BIDEN'S TENURE AS
president of the United States
is likely to usher in a renewed
push to increase fuel-economy
standards, a move Canada is
poised to follow.
His election in November
likely ended any notion that
Canada would break from conservative U.S. standards under
Donald Trump in favour of
setting its own or following
California or other U.S. states
that have attempted to set higher standards.
Brian Kingston, president of the Canadian Vehicle
Manufacturers' Association,
said the industry is " watching very closely " to see what
the Biden administration pursues on fuel-economy standards,
though the expectation is that
a return to Obama-era standards is likely. Kingston expects
Canada to follow suit.
" Our message has always
been to our government that
we must maintain alignment
with the United States, " said
Kingston, whose organization
represents the Detroit Three

SEE FUEL-ECONOMY PAGE 21

Automotive News Canada - February 2021

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