The Secretariat of the World Trade Organization recommended Friday that Canada correct its measures granting import-duty exemptions to exclusive car traders under its auto accord with the United States. The recommendation was issued in a final panel report released in Geneva, the Ministry of International Trade and Industry said. The issue in question concerns measures taken by the Canadian government under the Auto Pact between Canada and the United States. Under the mechanism, exemptions on import duties on complete automobiles are granted to those car traders that have a production base in Canada, achieve a certain level of added value in the country and meet a certain level of production to domestic sales ratio. Since 1989, however, no newcomers have been allowed into the system even if they meet the above requirements. The WTO panel report, which was established last February at the joint request of Tokyo and the European Union, will be adopted by the WTO Dispute Settlement Body within 60 days of Friday's circulation to all WTO members, unless Canada files an appeal to the WTO Appellate Body. "We welcome the outcome of this panel proceeding, which has upheld almost all of Japan's claims against Canada. We hope Canada will agree to the adoption of this report in the coming weeks and implement the panel's recommendations in good faith," MITI said in a statement issued Friday. Japan has insisted that Canada's Auto Pact measures are inconsistent with its obligations under the WTO Agreement, because vehicles of Japanese origin or services provided by Japanese are treated less favorably than those originating in Canada or the United States. The final report on Canada -- Certain Measures Affecting the Automobile Industry -- recommends that Canada conform with its obligations under the WTO agreement with regard to the Auto Pact.
