OTTAWA, Ontario -

In the wake of two trade developments announced in the last week that affect Canada, the impact for the country’s car dealers will likely be more indirect, according to Michael Hatch, the chief economist for the Canadian Automobile Dealers Association.

It was revealed this week that Canada, along with Mexico, is signing on to the Trans-Pacific Partnership, a free-trade initiative for the Pacific Rim that also includes the United States, Australia, Brunei Darussalam, Chile, Malaysia, New Zealand, Peru, Singapore and Vietnam.

This followed last week’s news of a proposed New International Trade Crossing for the Windsor-Detroit gateway, which has been hailed as a crucial trade corridor between the U.S. and Canada.

These announcements came with cheers from both the American Automotive Policy Council and the Canadian Vehicle Manufacturers Association, who touted the trade integration benefits and more open trade they believe will come from these developments.

So while these two bodies representing automakers are applauding, what about Canadian dealers? What are the impacts for them?

“As for dealers, the effects would be mostly indirect: trade deals will make other products more affordable, giving consumers more money to spend on vehicles,” Hatch told Auto Remarketing Canada this morning. “More directly, the removal of automotive tariffs would be welcome but would not have a major impact on our dealers since most imports are already covered by NAFTA.”

Likewise, industry analyst Dennis DesRosiers believes manufacturers will see more impact from these deals than retailers.

“The implications are more for the manufacturing side of the industry rather than the retail side of the industry,” he said. “The broader view is that free trade agreements are good for the economy and anything that helps the economy helps the auto sector. I like both these initiatives.”

Sharing the perspective of the used-car dealer in Ontario, Bob Beattie — the executive director of the Used Car Dealers Association of Ontario — talked about the impact of the Windor-Detroit bridge, specifically.

"From the dealer perpsective, with regards to the bridge, it’s really not much of an issue," he said. For dealers — and other businessmen and businesswomen — that do cross back and forth, it helps "somewhat," he said, but there already is a special pass they have that reduces the wait time.

Where the real benefits come in, he said, is for parts and vehicle manufacturers.

"That will be very, very substantial," Beattie said. "There’s certainly a value to the manufacturer."

He suggests it will help trim transportation costs, as these large trucks transporting vehicles back and forth won’t have to idle in line for upwards of two to three hours. That can also lead to environmental benefits, too, Beattie suggested. 

Canadian Automakers React

On the heels of Monday’s news of Canada joining TPP, CVMA released a statement applauding the decision. The association’s membership consists of Ford Motor Co. of Canada, General Motors of Canada, Chrysler Canada and Navistar Canada.

“The CVMA and its member companies commend and applaud the Prime Minister and the Minister of International Trade for their success in negotiating Canada’s entry into this important trade initiative for the Pacific Rim,” officials said.

“Since the groundbreaking Canada-US Auto Pact, Canada’s auto industry has developed as part of a highly integrated North American sector,” they added. “This integration was further supported by the Canada-United States Free Trade Agreement, and by the North American Free Trade Agreement.

“Entry into the TPP will ensure the North American automotive sector will continue to benefit from high levels of integration,” CVMA continued. “Canada’s automotive sector remains Canada’s largest manufactured export. The Canadian auto sector applauds Canada’s success in joining its NAFTA trading partners in this important new trade opportunity.”

This came after the joint statement from CVMA and AAPC on Friday in support of the Detroit-Windsor bridge crossing.

In the release, CVMA president Mark Nantais stated: "We have long supported additional international infrastructure capacity in the Windsor-Detroit gateway because it is a critical trade corridor that supports automotive manufacturing and jobs in both Canada and the United States.”

Officials argued that given the tightly connected Canadian and U.S. auto industries, the auto trade is a $100 billion per year business, stressing that most production parts and finished vehicles are transported back-and-forth via the gateway between these two cites.

“As a result, the New International Trade Crossing will help make the region more attractive for future jobs and economic growth,” Nantais noted.

Chiming in, Blunt said: “The new crossing will help boost the competiveness of the North American automotive industry and add 8,000 permanent jobs, according to an independent economic study just completed by the Center for Automotive Research.”

Nantais also suggested that “this new crossing will finish a much needed uninterrupted link between Ontario’s 400 series highways, the future Windsor-Essex Parkway and Michigan’s interstates and provides an option that we believe necessary in such a critical trade corridor. We are hopeful that both governments will proceed toward final design and construction without delay.”