Canada-United States Automotive Agreement (Auto Pact) 1965

By the latter rule, the International Trade Administration (ITA), the US Department of Commerce, repeals the rules relating to the implementation of the Automotive Products Trade Act of 1965 (Act). This status was implemented by the Canada-United States Automotive Products Agreement (Auto Pact) of 1965. Since the North American Free Trade Agreement (NAFTA) came into force in 1994, trade in automotive products between the United States and Canada is no longer subject to the act of cessation or the law. The signing of the agreement in 1965 removed tariffs between the two countries. In return, the three major automakers (General Motors, Ford and Chrysler), and then Volvo, agreed that auto production in Canada would not fall below the 1964 level and that they would ensure the same production/sales ratio in Canada. [6] [7] APTA`s two stated objectives were to reduce production costs in Canada by producing a smaller range of vehicles and components more efficiently and to reduce vehicle prices for consumers. [8] The agreement was signed on January 16, 1965 at the LBJ Ranch in Johnson City, Texas, by President Lyndon Johnson and Foreign Secretary Dean Rusk for the United States, as well as by Prime Minister Lester Pearson and Foreign Minister Paul Martin Sr. for Canada. But Canadian surpluses have become a major nuisance in the United States. The United States considered that the safeguards of the production/sales ratio and minimum value-added values maintained by Canada should be temporary, while Canada insisted that they be permanent. The United States considered that, as the agreement stated, the goal was a free market system, while Canada referred to another clause stating that the objective of the agreement was to allow both countries to participate „on a fair and equitable basis“ in an expanding North American market.

On January 16, 1965, Prime Minister Lester Pearson and President Lyndon Johnston met in Texas to sign the Canada-United States Stop Act. The agreement represented an important compromise between free trade and decent work for Canadians. Nevertheless, the act of judgment had been important for several reasons. . . .