By on January 17, 2014
southkorea-02

Imported vehicle sales by country. Source: Canadian Vehicle Manufacturers Association

Companies building cars in Canada are lobbying at the last minute to, kill an “imminent” free trade deal between Canada and South Korea that the automakers say would damage the Canadian auto industry and the greater Canadian economy. Ford Motor Co. of Canada Ltd. president and chief executive, Dianne Craig, said on Thursday that the U.S.-Korea trade agreement enacted in 2007 has been a “disaster” for auto makers. Craig urged the Conservative government not to make the same mistake as the United States.

“We understand that [the Canadian government] need[s] to look for what’s in the best interests of Canada,” Ms. Craig said in an interview with Toronto’s Globe & Mail. “But, frankly, autos are the greatest driver of GDP and we think we need to have a pretty strong voice in this conversation. This is not good for autos, which means it’s not good for the economy, which means it’s not good for Canadians.”

According to Ms. Craig, Canadian officials told Ford and other Canadian car companies in December that the free trade agreement with South Korea was “imminent.” Without getting into details, Craig said that the deal currently on the table is worse than what the United States got in 2007, but that the automaker is continuing discussions with the government on the issue.

The fierce opposition from Ford and other automakers has apparently resulted in Ottawa applying the brakes and at least temporarily delaying the agreement. Canadian federal officials won’t comment other than saying that  the government hasn’t yet taken a final position.

Prime Minister Stephen Harper said last week that he “hopes” Canada and South Korea will reach a deal shortly, though he acknowledged the agreement might fall through.

Ford’s position is that instead of a bilateral agreement with Korea, Canada would be better off working through the  current Trans-Pacific Partnership to make South Korea make its markets more open to imports including cars, and end currency manipulation. Canada is one of the twelve Trans-Pacific Partnership negotiating partners. South Korea has expressed interest in joining the TPP and like the other 11 members, including the U.S., Canada has veto power over new members. That gives Canada some leverage beyond the bilateral talks.

Canada had a $2.7 billion (Canadian dollars) trade deficit with South Korea in 2012, and motor vehicles represented more than 80% of that. That year Canada imported 131,174 Korean-made vehicles in 2012 versus exporting fewer than 3,000 Canadian built vehicles to South Korea.

Bringing up the U.S.-South Korea trade deal, Craig pointed out that under that agreement by next year U.S. tariffs on Korean cars will have been eliminated, but that continuing non-tariff barriers have kept American and European automakers from gaining market share in South Korea despite the free trade deal.

“To us, they are not a good fair trade partner and they have proven that in the last two agreements,” Craig said. “That is our concern for Canada. All you have to do is look at the data and it speaks volumes.”

Some Canadians have said that the trade agreement and car imports from Korea just might have to be the price the auto industry has to pay in exchange for the billions of dollars in government assistance to that industry in recent years. Ford itself received a $71.6 million loan from the Canadian government just last year to help pay for some retooling at Ford’s Oakville, Ontario assembly facility. Craig rejected that connection.

“There are many components that go into manufacturing competitiveness in Canada,” she said. “There is a lot the government has done to support our industry. But frankly this [Korea-Canada] agreement would set automotive manufacturing back in Canada.”

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63 Comments on “Canadian Automakers Make Last Minute Lobbying Effort to Delay Korean Trade Deal...”


  • avatar
    bd2

    Gee, hardly hear of the Europeans complaining (well, the Germans), as sales of imports in Korea rose 20% last year and comprised 12% of the Korean passenger car market, and import sales (which doesn’t include foreign brands built in Korea like much of GM Korea’s lineup) are expected to see a double digit increase for this year.

    And what currency manipulation? The won has risen sharply against both the US dollar and the yen.

    • 0 avatar
      Lorenzo

      There have been VERY short-lived spikes, both up and down, but curiously, the overwhelming time, the exchange rate vs the dollar has been: $1=1,100 Won +/-, or one Won is worth $0.0009. That’s the rate today, the rate last June, the rate in January 2013, and the rate two years ago. It’s been AMAZINGLY consistent in between momentary spikes. Maybe the South Korean economy is in sync with the American economy, traveling in lockstep through ups and downs, but really, how likely is that?

      • 0 avatar
        ccode81

        The problem of Korea is that they have such a narrow range of sweet spot currency range.
        Huge debt borrowed in foreign currencies and short term.
        If the rate gets too weak, they struggle to pay interest rate, and more over get hard to roll over to next loan.
        If the rate gets too strong, they’ll lose price competition against Japanese products.
        And that is an economy depends 70% of GDP to exports.
        1050-1100 KRW per USD is the only place they can survive at the moment.

        • 0 avatar
          Lorenzo

          Well, you explained the why of it, but that still confirms that the Won is being manipulated. Auto makers in Canada are saying an export-driven economy that manipulates its currency is bad news for Canadian auto manufacturing, and that’s essentially correct.

          • 0 avatar
            ccode81

            Yes. Korea is FX manipulating nation.
            Bank of Korea is a very rare case that central bank is running red.
            BOK issues so called “currency stabilization securities” to get bullets (I.e USD) to fire into market when it needs to weaken their currency.
            Most are sold to foreign investors.

            In my opinion, this does not sound sustainable and just keep narrowing own sweet spot.

            One advice to Canadians, if you don’t like them geting large share, don’t buy it.
            Japanese market gave absolute NO to Hyundai by consuming less numbers than Ferrari. They eventually packed and left.

          • 0 avatar
            wsn

            “One advice to Canadians, if you don’t like them geting large share, don’t buy it.”

            As a Canadian, I like Korean cars just OK. Never bought one, but will check out the offerings.

            It’s the CAW (Canadian UAW) that don’t like any form of competition. They work for foreign car makers and pretend to be domestic. Just FYI, Canada does not have a domestic car maker.

  • avatar
    th009

    Imports had a 12.23% market share in 2013, and rising quickly. CVMA’s numbers are from 2009!

  • avatar
    Big Al from Oz

    This is what happens when a currency like the CAD moves with commodities.

    The Canadian’s just can’t state because we are uncompetitive we should not trade with someone who can do better than us.

    Who are the other Auto manufacturers? Ford appears to be the one whining to most.

    Become competitive in Canada or shut down uncompetitive industry that bleeds taxpayer/consumer dollars. Is it a good investment the Canadian auto industry? Or does the government pander to socialist’s/unionist’s and the big end of town.

    Sudsidisation reduces the standard of living, creates a more protected and unproductive market. It’s odd that the so called free countries adopt such ideologies.

    • 0 avatar
      mkirk

      Every now and then your “so called free countries” have a pressing need to produce a bunch of tanks and aircraft in order to maintain this so called freedom of yours. As such simply offshoring the construction of the implements that allow for the rapid buildup of things like tanks and planes isn’t an option unless of course you are willing to also offshore your nations defense. I don’t care for subsidies and I think the way we do it has issues but there are national defense issues that go along with allowing the death of manufacturing things like cars for a country. Not everything happens in your tidy little bubble.

      • 0 avatar
        Big Al from Oz

        mkirk
        So how much military hardware is Canadian?

        Military conflict was mankinds’ first global industry. It’s no different now.

      • 0 avatar
        Demetri

        This isn’t 1941. A war will never be fought like that again. If you’re trying to convert a modern car manufacturing line over to military equipment, you’ve already lost the war.

        • 0 avatar
          Pch101

          Whaddya mean? You mean that they can’t just switch over from minivans to F-16’s with a week’s worth of retooling?

        • 0 avatar
          mkirk

          So they said after WWI. The world is a dangerous and unstable place. Look, I don’t care for how the bailouts went down and I don’t really care for what is going on in the article. But I do believe that a country that lacks a manufacturing base has a problem should the world go to crap and I get sick of the steady drumbeat of contempt from certain people on here who love to talk about what is best for the American auto industry and what a closed and terrible market we have because we miss out on crappy little trucks because we like big trucks all while the Auto industry in their own country vanishes. Lots of countries have tariffs to protect domestic industry so get over yourself.

          And Companies are going to lobby for what is in their best interest. Ford nor GM dictate Canadian trade policy. If Canadians have issue with the policy of their government then I would suggest they take up the matter at the ballot box.

          • 0 avatar
            Big Al from Oz

            @mkirk
            Food is probably the most important issue for a country.

            More correctly the term you should use is industry, this covers, agri, minerals, manufacturing, service, etc.

            So long as there is several of the above you will be okay. Sort of hedging. You need something to export above what you import.

            So, you only need exports to maintain your standard of living. Canada will have some manufacturing, but it also has a solid agri and mineral industrial base.

            Let your poorer southern NAFTA neighbours be the manufacturers of relatively low tech products and compete with developing nations. Canada has to look forward, not backwards.

          • 0 avatar
            racer-esq.

            Automation is actually bringing significant manufacturing back to the United States. Labor costs are not the driver that the used to be because:

            1) Cheaper automation minimizes the value of cheap labor.

            2) Certain manufacturing requires automation no matter what. E.g. you need robots spot welding a body for consistent high quality production, no number of cheap Chinese peasants with stick welders can replace that.

            3) Logistics/transportation expenses are non-trivial.

            And South Korea is not a manufacturing paradise. GM decided to focus on Opel and kill Chevy in Europe in part because the militant Korean unions were undermining the cost-effectiveness of GM Korea (effectively the entire Chevy product line in Europe).

          • 0 avatar
            racer-esq.

            Plus, if we ever do get into another world war situation it is going to be nuclear winter. Not a battle to see who can make the most tanks and planes.

          • 0 avatar
            Big Al from Oz

            @racer-esq.
            Australia is heading down a more heavily automated route along with bio-tech and other high tech electronics (not Smart phones and LCD, they aren’t high tech to assemble)

            Australia actually took work away from the Chinese. Australia now produces most of the world’s tiny camera’s used in electronic gadgetry, smart phones.

            A fully robotic factory was set up to do it. So anything is possible.

          • 0 avatar
            RobertRyan

            @mkirk
            Agree with you on this one. You need an industry that can support. Your defense industry when needed.

          • 0 avatar
            Pch101

            At this point, defense and automotive production aren’t well integrated. In the modern era, some of the weaponry is highly complex and it has to be stockpiled long before the war starts. There’s no chance that we’re going to start building tanks and airplanes on a line that produces F-150s; we don’t need the automakers in order to maintain national security.

            That being said, those F-150s are quite profitable, and no one who understands the US auto industry would possibly believe that there isn’t a substantial market for them.

      • 0 avatar
        wsn

        “Every now and then your “so called free countries” have a pressing need to produce a bunch of tanks and aircraft in order to maintain this so called freedom of yours.”

        Are you implying that Canadians should only buy GM/Ford as a gratitude for the American protection?

        Then go f*ck it. We will have nuke of our own and build our own fighter jet (we indeed had the best fighter jet, but canceled due to American request). See, it’s a two way street. Whatever protection the US is providing Canada is not free lunch. Canada has the natural resource and technology to become the 3rd or 4th ranking nuke country in just a couple years.

    • 0 avatar
      Lou_BC

      Canadian automakers are complaining????? WTF…. Most are USA companies. Is Toyota or Honda Canada part of the bitchfest?
      They (USA companies) have previously lobbied government to keep tariffs in place when the WTO deemed tariffs illegal. Same old sh!t just different pile. Dig further and you’ll see just the USA companies complaining.

    • 0 avatar
      Lorenzo

      “Become competitive” would make sense if Canada were dealing with other countries that also let their currencies float. South Korea doesn’t let its currency float and depends on exports to keep its economy going. Canada has a balanced economy and lets its currency find its natural level. South Korea and Canada are simply unequal trading partners. There’s no logical reason why Canada should cripple its auto manufacturing base in the name of free trade that isn’t really free.

    • 0 avatar
      bd2

      Canada has the same issue as Australia.

      A strong currency due to the export of natural resources and a small market which can’t support a stand-alone auto manufacturing w/o an export base (Canada at least has the US, even tho more and more production is shifting to Mexico).

  • avatar
    Lou_BC

    @mkirk – I’ve never heard that excuse before. Bombardier would be in a better position than Ford Canada to retool for military products. If I apply that logic to softwood tariffs, did thd USA put tariffs on Canadian products to ensure it has enough fibre to make toilet paper for a potential diarrhoea epidemic?

    • 0 avatar
      Big Al from Oz

      @Lou_BC
      I think you are quite correct. Look at where the Canadian military is are buying more and more vehicles from.

      Mercedes Benz?

      The Big 2 would be complaining the most. I can’t see Sergio complaining, he want’s to manufacturer in Europe.

    • 0 avatar
      th009

      @Lou, I see you have been thinking of new offensive warfare weapons! :)

    • 0 avatar
      RobertRyan

      Lou_BC
      Correct as well. An automotive company alone is not going to provide that defense backup when needed. You need a company working in the area, with specialist skills

  • avatar
    Big Al from Oz

    @Lou_BC
    Do you support biological warfare with the US?

    Maybe if the US military succumbs to a bout of the $hits and the Canadian’s have the toilet paper market cornered you guys will have some leverage over them ;)

    • 0 avatar
      Lou_BC

      LOL. We might get invaded after all. Politicians are full of it, you can keep it in for only so long ;)

      Ford is being rather hypocritical. They are pushing for a FTA with the EU and pushing for reciprocity in relation to emissions and safety standards as well but they are terrified of the “yellow menace” from the East.

  • avatar
    pacificpom2

    Yes Ford already has experienced the level playing field with FTA’s. Check out what happened to the Oz Ford Territory. FTA in place and cars go between countries with no tariffs, everybody celebrates. Ford exports Territories to Thailand, as they import rangers etc.. from Thailand. Thai registration authorities now stick a huge “engine capacity tax” that bangs the price of the Territory above $100,000.00.
    Cannot do anything about it as it is not an import tax, just a registration tax. You will see lot’s of Korean cars into Canada, and possibly Canadian manufactured cars to Korea, free of import tariffs, as per the FTA, but watch out for the “local” authorities putting imposts on them.

    • 0 avatar
      Big Al from Oz

      @pacificpom
      Malaysia has the same deal. Buy a Proton (locally manufactured) it has a lower registration cost.

      Australia should put it’s foot down on the Thai’s and don’t allow the import to the 10 of thousands of pickups.

      I bet the Thai’s would have changed their tune.

      • 0 avatar
        RobertRyan

        The Thais are not playing by the rules.Koreans have been ding the same ,so much for FTA’a

        • 0 avatar
          pacificpom2

          Perhaps we should follow the French in the early years of Japanese imports. Urban legend says that France was, as still is, very protective of it’s industries and saw the writing on the wall of the Japanese invasion. So to forestall the decimation of their car industry they said that France will play by the WTO rules and allow Japanese cars into France, but, they must come through one port only and they must be subject to a rigorous safety and compliance check. Therefore throttling the imports without breaking the rules. This, as far as I can see doesn’t break any FTA’s :)

          • 0 avatar
            Big Al from Oz

            @pacificpom2
            I was just in France, and I was driving a Toyota Yaris. I saw many Nissans as well, this may have something to do with the Renault alliance.

            France, has changed since the Eurozone has been put into play. Economic liberalisation is more apparent in France.

            There are quite a few, actually a large number of German vehicles as well. Vehicles like Kia/Hyundai are also present.

            French branded cars are still very apparent and rule the roost.

            Economic liberalisation of economies and freer trade is a necessity. Trying to protect and defend specific areas of industry proves that a country is efficient. This leads to waste, which equals cost to the consumers.

            Cost to consumers equate to money not available to be spent on areas of more value to a country.

            Subsidisation and protectionism is another form of welfare that suits socialists and the big end of town.

            Most arguments concerning protectionism is quite subjective and easily distorted by those who fear the unknown and don’t like progress, That they can’t accept, manage or interpret.

            Flexibility is the key to survival. That’s how human’s became dominant and not other animals.

          • 0 avatar
            Big Al from Oz

            @pacificpom
            Here is a comment I made, above.

            “Subsidisation and protectionism is another form of welfare that suits socialists and the big end of town.”

            If you read it you will see why the middle class is diminishing.

    • 0 avatar
      bd2

      The problem is what Canadian built cars appeal to Korean consumers?

      GM has a manufacturing base in Korea which covers pretty much all its top sellers in Korea; where GM needs to do better is in the luxury market (which they probably see improvement with the new and competitive offering from Cadillac)?

      Chrysler doesn’t really have any competitive sedans; and the market for thirsty Jeep CUVs is pretty small.

      The Ford Fiesta and Fusion are built in Mexico (with added Fusion production in the US) and the Focus and Escape are built in the US.

  • avatar
    Spartan

    If only the American auto industry protected itself from losing its manufacturing base. Between the FTAs and the UAW, I don’t know what’s worse. I can tell you from living in South Korea, Koreans do everything to defend their domestic manufacturing while using FTA to increase profits of their home based companies.

    Hyundai, Kia, Samsung and LG are the heavy hitters here and FTAs have done nothing but fatten the pockets of these companies. Kudos to the Canadian(read: American) automakers for protecting the NA market and its manufacturing base.

    • 0 avatar
      RobertRyan

      Agreed.

    • 0 avatar
      c6steve

      Please explain why you feel the UAW is just as bad if not worse than FTA’s

    • 0 avatar
      bd2

      Almost 70% of Hyundai/Kia’s manufacturing is overseas.

      Pretty much all their top sellers in the States are built in the US and 90% of what they sell in Europe is built in Europe or Turkey.

      Hyundai/Kia haven’t built a plant in Korea in ages (partially due to the militant auto labor unions) – with plants being built/expanded in the US, Europe, Russia, China, Brazil, Turkey and India recently.

      Also, Samsung and LG build most of their smartphones and TVs in China – like most other electronics makers.

      And American brands such as Apple, Banana Republic, GAP, Polo, Calvin Klein, A&F, Hollister, J Cew, The North Face, Nike, etc. are quite popular in Korea.

  • avatar
    Robbie

    In Economics, it is not controversial that countries can gain from specializing in the good for which they have a comparative advantage, and trading that good for other goods. In South Korea, there is a comparative advantage in the production of cars.

    Ford is advocating trade barriers. The net effect of such a policy would be that Canadian consumers will have to spend additional money on car purchases to achieve the same satisfaction levels. Therefore, Canadians are effectively paying a tax that Ford uses as a de facto subsidy. It is not controversial among Economists that this type of “Ford tax” makes the country as a whole worse off, even though some pockets of people (such Ford workers) may benefit.

  • avatar
    Lorenzo

    Neither Ford nor any other opponents of a “free trade” agreement with South Korea is advocating trade barriers. They’re advocating balanced trade, and that’s not possible when one party doesn’t let it’s currency float and subsidizes it’s exports.

    Canadians are not being taxed by being denied the benefit of those South Korean subsidies in the form of artificially low prices. What they would gain would be offset by a reduction in domestic manufacturing and employment, caused by an inability to compete with those artificially low prices.

    Economics, called ‘the dismal science’ for a reason, is unequipped to recognize a bad business deal. It assumes the parties are equal and playing by the same rules, a condition that rarely exists in the real world.

    • 0 avatar
      Pch101

      The won does float. South Korea has had a free float policy for over a decade.

      The allegation is that there are non-tariff barriers that would remain in place with an FTA. That may or may not be true, but the reality is that opposition to the FTA is driven by the expectation that Detroit has more to gain without the FTA than with one.

      Ford and Chrysler have very little expectation of selling many Canadian-made cars in South Korea. GM, which is on both sides of this trade, obviously doesn’t think that it is going to export much from Korea back to Canada, either.

      Automakers tend to choose the side that favors them, on a case-by-case basis. Unlike some of the posters on this website, they aren’t ideological about FTA agreements, they just want to make money.

      • 0 avatar
        Lou_BC

        @Pch101 – You make some very valid points. Car companies do what is good for them. Ford wants a FTA with the EU but not the Orient. They do not see anything from the EU as a threat. It is an entirely different story when they look at Asia.

        I look at things from the perspective of what is good for me the consumer. Canadian vehicles already cost more and tariffs are partially responsible. Korean car makers currently do not make anything that I am remotely interested in but there are other companies playing in that neck of the woods that just might.

    • 0 avatar
      bd2

      Again, what autos built in Canada appeal to the Korean market?

      All the German autos sold in Korea are imported into Korea whereas 90% of Hyundais/Kias sold in Europe are built in Europe and Turkey.

      Maybe the Koreans should push for “equal” trade with Europe (esp. since the European autos are higher end and thus make up a higher aggregate dollar amount).

  • avatar
    Joss

    They’re in for it more with ZIP/Autoshare on the longer term. Canada’s a small population concentrated in major urban areas.

  • avatar
    ect

    The CVMA’s chart purporting to show that imported cars dominate the Canadian market is grossly misleading.

    Since the Canada-US Auto Pact was signed in 1966, and continuing through FTA and NAFTA, Canada and the US have constituted a single market for motor vehicles. The car companies have organized production accordingly, producing a model in a plant for sale in both countries.

    So, cars built in the US and sold in Canada are not truly “imports” – they are effectively part of domestic North American production. As are cars built in Canada for sale in the US.

    If the CVMA made a chart of vehicle exports on the same basis as their imports chart, it would show Canada as a huge exporter of motor vehicles. Of course, this wouldn’t suit their totally self-interested lobbying, so they won’t do it.

    • 0 avatar
      Pch101

      Naturally, the stakeholders are going to spin the story. That’s to be expected.

      As a practical businessperson, I’m sure that you know what’s up: If the Detroit automakers want to sell cars to Koreans, then they can already build them in other places that have trade agreements with South Korea, such as the EU and US. In GM’s case, they can just build them domestically in South Korea.

      They aren’t likely to have Canadian output that is well suited for Korean export, nor is there any need for that situation to change. Accordingly, they have nothing to gain and can only lose from a Canada-South Korea FTA. It would be surprising if they didn’t lobby against such a thing.

      • 0 avatar
        Spartan

        @Pch101,

        Nothing to gain? They sure as hell have a lot to lose! If Canadian consumers buy more and more Hyundais and Kias, they will seal their own fate when it comes to their manufacturing industry. It’s more of a problem of patriotism than anything else. Koreans will support their home based manufacturing by default. Canadians and Americans will not, for whatever reason. This is despite the fact that American cars are competitive or better than the competition.

        The only American cars Koreans will buy are Chevrolets. The other big three are rare sights here. The Buick LaCrosse (Daewoo Alpheon) is somewhat popular, but it had to be a Daewoo for that to happen. And yes, they had to set up shop and get in bed with a Korean manufacturer to make that happen.

        • 0 avatar
          RobertRyan

          @Spartan
          “Chevrolet” is GM Daewoo.

          • 0 avatar
            Spartan

            Not really seeing where you’re going with that but umm, yeah I’m already aware of that.

          • 0 avatar
            RobertRyan

            @Spartan,
            “The only American cars Koreans will buy are Chevrolets”
            Where am I going NOT really Chevrolet but re badged Daewoo’s, which is not a good thing.

        • 0 avatar
          Pch101

          “Koreans will support their home based manufacturing by default.”

          Well, they do seem to be acquiring a taste for German luxury badges, but yes, your point is well taken.

          Ford and Chrysler have nothing that they could import in large numbers, and GM is already building for the home team. (If anything, GM seems prepared to reduce the size of its Korean operations.) There’s no upside in the trade agreement with Canada; the cars being built in Canada won’t be flooding into South Korea, no matter what happens.

        • 0 avatar
          Lou_BC

          @Spartan- Patriotism? …………. WTF?

          Canada does not have any auto companies of its own….. well, there is an electric car company and a rare exotic… but I digress.

          We have Acura, Chrysler, Ford, GMC, Suzuki, Toyota, and Kenworth building in Canada.
          Implying it would be my Canadian patriotic duty to buy Canadian would mean what? Buying a vehicle built in Canada by a foreign company or one built by a Canadian owned company???

          Most Americans raise the flag in relation to Ford, GMC, Chrysler (even though they are no longer American??), and Harley Davidson. They don’t seem to be concerned about Polaris and Victory though.

          If I went the so called patriotic route, I’d be riding around on a Spyder (Bombardier) when there wasn’t any snow on the ground and on a Skidoo (Bombardier) for the rest of the year. I could figure out how to get a CanAm side-by-side quad (Bombardier) converted to street use.

          It would be fun but my wife would want to kill me.

          • 0 avatar
            Pch101

            He was referring to Korean brand nationalism.

            The tariffs and non-tariff barriers may all be legitimate issues, but a general lack of acceptance of non-luxury foreign brands among South Koreans is also an issue. They support the home team.

        • 0 avatar
          bd2

          Actually, GM Korea’s sales went UP when they switched from the Daewoo brand to Chevy (since Chevy had a better reputation than Daewoo).

          Also, GM Korea did a big business in selling Chevy replacement badges before the switch as Daewoo buyers would rather their cars badged Chevy than Daewoo.

          And basically, all the popular models that GM Korea offers is built in Korea; where GM needs to do a better job is with the higher end market and GM is just started to get more competitive with the better offerings from Cadillac.

          Before the rise of the yen (which preceded the current downturn), Honda and Toyota saw a large rise in exports to Korea (at one time, the Accord and CR-V were 2 of the top selling imports) and this is for Japanese autos despite the history between the 2 countries.

          The problem with Ford and Chrysler is that they didn’t sell anything the Korean market desired (altho Ford is starting to change that with their recent offerings); meanwhile VW is the 2nd best selling import brand after BMW.

          • 0 avatar
            RobertRyan

            @bd2,
            “The problem with Ford and Chrysler is that they didn’t sell anything the Korean market desired (altho Ford is starting to change that with their recent offerings)”

            I think that is going to be hard struggle for Ford against Hyundai/Kia Outside of the Thai built Ranger and Everest, very little would appeal to Australians in the proposed new Ford lineup.

    • 0 avatar
      RobertRyan

      @ect,
      So Canada is really the same as the US? I do not think so.Last time I looked Canada was not the 52nd State of the US.
      “So, cars built in the US and sold in Canada are not truly “imports” – they are effectively part of domestic North American production. As are cars built in Canada for sale in the US.

      • 0 avatar
        Lou_BC

        @RobertRyan – the AutoPact between the USA and Canada started that pattern and NAFTA continues it. USA auto companies and Ontario based politicians lobbied to have tariffs kept in place against every other country even though the WTO deemed it illegal to do so.

        The same unit built in Canada sold in both jurisdictions can be significantly different in price.

        • 0 avatar
          RobertRyan

          @Lou_BC,
          As I suspected US Auto Companies were the main drivers of somehow thinking Canada was the 52nd state.
          We noticed how a Holden Commodore can be so much cheaper in the US, although made here.

    • 0 avatar
      Big Al from Oz

      @ect
      Canada isn’t the US. It even has it’s own currency.

      Canada is in both a fortunate and unfortunate position with the US.

      It can profit from the US, but it can also become overly influenced by the size of the US economy reducing it’s independence to act on foreign relations and trade.

      Australia and NZ are in a similar relationship. But we allow the NZ’ders more independence. This is probably due to the smaller size of our economic might.

      Canadian’s can have more influence in their own destiny. This has been occurring more and more since the GFC. Canada is realising it can’t be too reliant on the US as the US can only do so much.

      • 0 avatar
        Lou_BC

        @BigAl – the FTA signed with the EU appears to be signalling a move away from USA based influence/domination of our markets.
        The USA uses tariffs to protect its own industries and that does lead to inefficiencies. A prime example is softwood lumber. Twice the USA has put tariffs on our lumber to protect what is for the most part a very inefficient industry in the USA.
        The last time around, Canadian companies decided to find other markets for our wood. BC now sells more lumber to the Orient than to the USA. The USA housing collapse did effect our industry but it was relatively minor. Canada for the most part faired very well post 2008 meltdown. Ontario which is heavily dependant on the USA auto industry was the exception.

  • avatar
    wmba

    Ford supported the US South Korea Free Trade pact in 2007, but are dead set against the newly signed Canada South Korea Free Trade pact signed yesterday.

    Where is the logic? We get Diane Craig, Prez of FoMoCo Canada, absolutely working herself up into a full steam aneurysm railing against South Korea, blah, blah this, blah blah that, and claiming the auto industry is the main driver of wealth in Canada. She is joined by the union brains trust at Unifor, and the intellectually bankrupt government of Ontario.

    So our Prime Minister told Ford to get its story straight yesterday, and I applaud him for it, just as I think most of his other policies are somewhere right of Genghis Khan and stupid. And unnecessarily mean and unfair.

    What he told Ford was, in the US you have free trade with Korea which you supported, the US and Canada have NAFTA, so if you want to export to South Korea – do so. But Canada is not going to have a special agreement to satisfy Ford, nor should they expect to be treated as a special case.

    Great gnashing of teeth followed from the usual suspects.


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