Free Trade?
Canada To Impose 6.1% Tariff On Import Luxury Cars To Comply With WTO
Updated 8:44 PM ET May 31, 2000
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OTTAWA -(Dow Jones)- The Canadian government is expected to place a 6.1% tariff on imports of luxury automobiles manufactured overseas by Ford Motor Co., DaimlerChrysler AG and General Motors Corp. to comply with a World Trade Organization ruling, The Wall Street Journal Interactive Edition reported.
The move would give the Big Three auto makers' products treatment equal to that for luxury vehicles made by other international concerns.
For instance, luxury automobiles such as BMW, made by Germany's Bayerische Motoren Werke AG, and Lexus, made by Toyota Motor Corp. (TM) in Japan, are subject to a 6.1% tariff. But Ford's Jaguar, made in England, and Mercedes-Benz, made in Germany by Daimler (DCX), can enter Canada duty-free. Under the 1965 Canada-U.S. auto pact, the Big Three have been exempt from tariffs on goods shipped into either country.
The WTO ruled that this constitutes an unfair trade practice against auto makers other than the Big Three, especially in Europe and Japan.
Trade Minister Pierre Pettigrew declined to specify what action he will take, saying Canada will consult with the automobile industry and will "honor its WTO obligations."
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