Throughout the government's consultations with the auto sector, we did hear that the tariffs were not really the issue—Japan doesn't have an auto tariff—but that some of the non-tariff barriers that they were facing were. Our sense is that the major non-tariff barrier for a Canadian auto producer is right-hand drive vehicles. They would obviously have to produce right-hand drive vehicles to penetrate the Japanese market.
Through the original appendix in the TPP agreement, and based on some of the concerns we heard expressed by Canadian auto producers, we did negotiate a binding and enforceable side letter with Japan that deals with some of these non-tariff barriers that were addressed through our consultations, namely noise and emissions reductions and preferential access to financing given by Japanese dealerships to Canadian cars, among others.
This letter between Minister Champagne and his Japanese counterpart that we signed establishes the rules of dispute settlement using the dispute settlement chapter of the original TPP agreement, which makes those provisions enforceable.