Japan-based auto makers back Ottawa’s free-trade deal with South Korea

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The federal government's plan to sign a free-trade agreement with South Korea has won the support of the Japanese Automobile Manufacturers Association (JAMA) of Canada.

JAMA represents Honda Motor Co. Ltd. and Toyota Motor Corp., which manufacture vehicles in Canada, as well as other Japan-based auto makers. It said an agreement with South Korea is an important step toward more economic partnerships in the Asia-Pacific region.

"The successful conclusion of a trade agreement with Korea would also allow Canada to direct its full resources towards the swift completion of the economic partnership agreement with Japan," Jerry Chenkin, chairman of JAMA Canada and president of Honda Canada Inc., said in a statement issued Wednesday.

Honda and Toyota have been concerned about a deal with South Korea that would eliminate the 6.1 per cent tariff Canada levies on vehicles imported from that country. Such a move would give Hyundai Auto Canada Corp. and Kia Canada Inc. an advantage over Honda and Toyota unless Canada signs a deal with Japan that also eliminates the same tariff on vehicles the two Japan-based companies import from outside North America.

So JAMA Canada has been lobbying the federal government to step up the pace of talks on a bilateral trade deal with Japan and the Trans Pacific Partnership talks, which include the United States, Chile, Australia and several other nations.

The five auto makers that assemble vehicles in Canada are now divided on the South Korea agreement.

Ford Motor Co. of Canada Ltd., is vocally opposed to the deal, General Motors of Canada Ltd. has not taken a stand publicly and Chrysler Group LLC and the Japan-based companies support the deal.

Chrysler chief executive officer Sergio Marchionne said in Toronto earlier this month that he dropped his opposition to the deal after Prime Minister Stephen Harper reminded him that Chrysler did not oppose a U.S.-South Korea deal in 2010.