October 9, 2007
Canada headed for largest auto trade deficit in history, CAW says
Toronto, Ontario – A new study released by the Canadian Auto Workers Union (CAW) says that Canada’s automotive trade balance has deteriorated dramatically this year, with the country on track to record its largest automotive trade deficit in history.
The report, authored by CAW economist Jim Stanford, examines data covering auto exports and imports for the first seven months of this year, and says that Canada imported $4.3 billion of auto products more than it exported for that period. The figure includes finished vehicles and parts.
The study says that this year’s automotive trade deficit could reach $8 billion, which would represent the largest automotive trade deficit in Canada’s history.
The union says the largest automotive trade deficit is with Japan, exceeding $6 billion, while the most unbalanced relationship is with Korea, exporting 183 times as much automotive value as Canada sells in that country. The fastest-growing automotive imports have been from China, up by over 1,200 per cent in 10 years, and Korea, up by almost 600 per cent.
The CAW is urging the federal government to stop its free trade negotiations with Korea, which are taking place in Ottawa this week.
“Canada’s auto industry is already facing unprecedented challenges, mostly as a result of one-way trade deficits with Asia and Europe,” says CAW president Buzz Hargrove. “Korea has been one of the main culprits. Why on earth our own government would now reward Korea with even easier access to our markets is utterly beyond me. A free trade deal with Korea will take a bad situation and make it worse. The government should cancel these talks, and turn its attention to developing the well-round auto policy that we need.”