OTTAWA (AFP) — Canada's trade minister said Wednesday a World Trade Organization decision upholding a complaint over Beijing's import tariffs on auto parts could help revive Canada's ailing auto parts industry.
"It's a move in the right direction," said Trade Minister David Emerson. "It looks like (the WTO) thinking is in line with the arguments we've been making, and I think this will be helpful for the Canadian auto parts industry."
China is "a market that's growing and with our companies in such tough shape right now, a growing market is critically important to restoring health to our own auto parts industry," he added.
The case is the first time China has been the subject of a complaint that went all the way through to the WTO's Dispute Settlement Body since it joined the organization in 2001.
China has a minimum local content requirement of 60 percent for home-produced cars. If this is exceeded, it then levies the same tariff on the vehicle as if it was imported completely built.
The United States, European Union and Canada argued that this measure violates China's WTO accession agreement which pledged a progressive opening up of its markets.
Emerson said the high tariff made it "uneconomic" for Canadian parts suppliers to export to China, and it cost Canadian auto parts companies hundreds of millions of dollars in lost revenues.
The WTO interim ruling, he said, means the United States, European Union and Canada may eventually "retaliate or take trade action" against China when it is officially released.
"Hopefully it'll bring about a change in the practices that China's been applying," he said.
As well, Emerson urged Canada's North America-centric auto parts industry to "develop strategies for the modern global marketplace and start to expand their exports into rapidly growing markets like China."
The WTO decision, he said, "is removing a barrier and gives them a better opportunity to make that part of their transformative strategy. That's what they need."
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