Japan filed a complaint Friday with the World Trade Organization over Canada's recent decision to continue a preferential auto import tariff policy.
The policy, which originated with the 1966 U.S.-Canada Autopact, exempts specific auto manufacturers -- the U.S. Big Three, Volvo and Canadian Automobile Manufacturing Inc. -- from paying Canada's 6.7 percent import tariff if they meet requirements regarding local procurement and production.
But no other automaker is entitled to receive the exemption -- even if the requirements are met -- because the Canadian government agreed in the 1989 Free Trade Agreement with the United States and Mexico not to lengthen its list of so-called Autopact companies.
Japan maintains the policy clearly violates the WTO's provisions for national treatment and most-favored nation status.
The Canadian government, after conducting a yearlong review of overall auto policy, concluded last month to maintain the import tariff regime. "We have been conveying our concerns to the Canadian government about the WTO consistency of its auto import tariff regime," a Japanese trade official said. "And it is regrettable that Canada decided to maintain such discriminatory measures."
Of the 160,000 units of dutiable imports to Canada, about 110,000 come from Japan and 20,000 each from South Korea and Europe, according to the Ministry of International Trade and Industry.