World Library  
Flag as Inappropriate
Email this Article

Canada–United States Automotive Products Agreement

Article Id: WHEBN0014354613
Reproduction Date:

Title: Canada–United States Automotive Products Agreement  
Author: World Heritage Encyclopedia
Language: English
Subject: Automotive industry in Canada, Automotive industry in the United States, 1965 in United States law, Canada–United States treaties, History of the automobile
Collection: 1965 in Canada, 1965 in Canadian Law, 1965 in Economics, 1965 in the United States, 1965 in United States Law, 2001 Disestablishments, Automotive Industry in Canada, Automotive Industry in the United States, Canada–united States Treaties, Free Trade Agreements of Canada, Free Trade Agreements of the United States, History of Canada (1960–81), History of the Automobile, Industrial History of Canada, Industrial History of the United States, Treaties Concluded in 1965
Publisher: World Heritage Encyclopedia

Canada–United States Automotive Products Agreement

The Canada—United States Automotive Products Agreement, commonly known as the Auto Pact or APTA, was an important trade agreement between Canada and the United States. It was signed by Prime Minister Lester B. Pearson and President Lyndon B. Johnson in January 1965.[1]

It removed tariffs on cars, trucks, buses, tires, and automotive parts between the two countries, greatly benefiting the large American car makers. In exchange the big three car makers (General Motors, Ford, and Chrysler) and later Volvo agreed that automobile production in Canada would not fall below 1964 levels and that they would ensure the same production-sales ratio in Canada.

Before the Auto Pact the North American automobile industry was highly segregated. Because of tariffs, only three percent of vehicles sold in Canada were made in the United States, but most of the parts were manufactured in the U.S. and overall Canada was in a large trade deficit with the States in the automobile sector.

The Pact caused vast and immediate changes. Canada began to produce far fewer different models of cars. Instead, much larger branch plants producing only one model for all of North America were constructed. In 1964, only seven percent of vehicles made in Canada were sent south of the border, but by 1968, the figure was sixty percent. By the same date, forty percent of cars purchased in Canada were made in the United States. Automobile and parts production quickly surpassed pulp and paper to become Canada's most important industry. From 1965 to 1982, Canada's total automotive trade deficit with the U.S. was $12.1 billion; this subsumed a surplus of around $28 billion worth of assembled vehicles and a deficit of around $40.5 billion in auto parts.[2]

The two nominal goals of APTA were to reduce production costs in Canada by dint of more efficient production of a smaller range of vehicles and components, and to lower vehicle prices for consumers.[2] The agreement is said to have benefitted Canadian workers and consumers by dint of lowered prices and increased production creating thousands of jobs and increasing wages. These newly created jobs were highly localised to southern Ontario, with little employment benefit to the rest of Canada. The jobs created by the new market conditions under the pact were almost exclusively blue collar; administration, research and development remained in the United States. This transfer of control of Canadian automaking operations to their US parent corporations substantially reduced the autonomy of the Canadian operations with respect to vehicle and component specification, design, and sourcing; manufacturing and production, branding and marketing, corporate policy, etc.[2]

The agreement also prevented Canada pursuing free trade in automobiles elsewhere internationally, and this North American exclusivity led Transport Canada to adopt the technical regulations of the U.S. National Highway Traffic Safety Administration rather than participating in the European-based development of international consensus on auto safety and emissions regulations.[3]

The Auto Pact was abolished in 2001 after a North American Free Trade Agreement had effectively superseded it.


  1. ^
  2. ^ a b c Crane, David. "Canada—United States Automotive Products Agreement". The Canadian Encyclopedia. Retrieved 2013-12-16. 
  3. ^ Lighting Regulation Round the World: What, How, Where, and Why, retrieved 2011-02-22

External links

  • CBC Archives A multimedia look at the Canadian auto industry before and after the trade agreement.
This article was sourced from Creative Commons Attribution-ShareAlike License; additional terms may apply. World Heritage Encyclopedia content is assembled from numerous content providers, Open Access Publishing, and in compliance with The Fair Access to Science and Technology Research Act (FASTR), Wikimedia Foundation, Inc., Public Library of Science, The Encyclopedia of Life, Open Book Publishers (OBP), PubMed, U.S. National Library of Medicine, National Center for Biotechnology Information, U.S. National Library of Medicine, National Institutes of Health (NIH), U.S. Department of Health & Human Services, and, which sources content from all federal, state, local, tribal, and territorial government publication portals (.gov, .mil, .edu). Funding for and content contributors is made possible from the U.S. Congress, E-Government Act of 2002.
Crowd sourced content that is contributed to World Heritage Encyclopedia is peer reviewed and edited by our editorial staff to ensure quality scholarly research articles.
By using this site, you agree to the Terms of Use and Privacy Policy. World Heritage Encyclopedia™ is a registered trademark of the World Public Library Association, a non-profit organization.

Copyright © World Library Foundation. All rights reserved. eBooks from Project Gutenberg are sponsored by the World Library Foundation,
a 501c(4) Member's Support Non-Profit Organization, and is NOT affiliated with any governmental agency or department.