Canada will record the largest automotive trade deficit in its history
this year, with the deficit possibly reaching 8 billion Canadians dollars (US$8
billion), according to a report from the Canadian Auto Workers (CAW) union
Canada will register a year-end surplus in finished vehicle trade of under 14
billion Canadian dollars, offset by a deficit in parts of close to 22 billion
Canadian dollars, said CAW economist Jim Stanford in the report.
"Not only is Canada's automotive trade performance now the worst-ever, it is
still deteriorating at a record rate," Stanford warned in the report entitled
Canada's Deteriorating Automotive Trade Performance.
The previous largest automotive trade deficit was 3 billion Canadian incurred
in 1979, Stanford said, adding 1999 was the best year for Canada's auto sector,
with a trade surplus of almost 15 billion Canadian dollars.
Stanford said nearly 90 percent of the deficit is due to five large bilateral
deficits with Japan, Mexico, Germany, South Korea and China.
While Canada's automotive trade deficit with Japan is the largest, exceeding
6 billion Canadian dollars, the most unbalanced relationship is with South
Korea. Canada buys 183 times as much automotive value as it sells in South
Korea, says the report.
"This trade deficit inevitably translates into a loss of jobs in domestic
automotive production", says the report, while calling on the government to
implement more aggressive auto trade policy so as to get more Canadian-made
vehicles and parts into Asian and European markets.