Thanks.
Last year, 16% of Ford's Canadian vehicle production was exported outside of NAFTA. That said, the U.S. market and NAFTA remain the single biggest and most important market for Canadian-produced vehicles and engines. All of Ford's Canadian engine production and 74% of Ford's Canadian vehicle production is exported to the U.S. and Mexico.
Ford has been and continues to be a very strong supporter of the North American Free Trade Agreement. In fact, it was the auto sector and the 1965 Canada-U.S. Auto Pact that became the basis for the Canada-U.S. Free Trade Agreement and then for the North American Free Trade Agreement.
NAFTA has created one of the most highly integrated and competitive automotive sectors in the world, including one of the most competitive and efficient global supply chains. Canada is a small vehicle market by global standards and Canada's integration into the larger NAFTA region has created economies of scale that have allowed Canada and the NAFTA region to competitively produce vehicles for export to other regions around the world. While Ford continues to support NAFTA, we recognize that as 25-year-old agreement there are opportunities to modernize the agreement.
That is why Ford is working with all three NAFTA governments to ensure the modernization of NAFTA preserves and enhances the globally competitive integration of the North American auto industry while also incorporating important advances to create a modern 21st century agreement that sets the standard that all future trade agreements should be measured by.
Specifically, Ford recommends modernizing NAFTA by adding strong and enforceable currency manipulation disciplines and by achieving acceptance of U.S. automotive safety standards across the region. In addition, Ford also supports modernizing NAFTA by streamlining customs procedures to make business more efficient, and by adopting high standard labour and environmental provisions and improving border infrastructure.
While continuing to support trade within the region, the modernization of NAFTA should also encourage trade diversification outside of the region by ensuring that North American vehicles can compete in global markets around the world. This is why it's critically important to ensure that both currency manipulation and an acceptance of U.S. vehicle standards are included in the modernization. These two issues are the most significant non-tariff barriers that vehicles produced in Canada or in North America face in global markets.
To date, Canada's auto sector and Canadians have benefited from Canada's unfettered access to the U.S. auto market as a result of NAFTA. When Canada concludes CETA, Canada's auto sector will be positioned with duty-free access to North America and to the EU as well, two of the largest and most important vehicle markets in the world.
Looking forward, Ford will continue to support Canada's efforts to establish new free trade agreements with countries like India and Brazil. These markets offer additional opportunities to increase Canadian vehicle exports.
Ford will also continue to speak out against markets that remain closed to Canadian vehicle exports, markets like South Korea and Japan. Closed markets can only be opened by achieving the right terms in trade agreements that eliminate all barriers, including currency manipulation.
Throughout our history, Ford of Canada has played an active and constructive role in articulating the trade policy issues that need to be addressed in trade agreements in order to support Canada's auto sector. We look forward to continuing to play this role as we talk about modernizing NAFTA.
Thank you.