International Trade committee  I'll give credit where it's due with the new government. I think that right after the new minister was sworn in, her office called us and she came to see us. I think we were the first meeting. If I could characterize the meeting, it was technical, and it was three hours long instead of the allocated one hour.

International Trade committee  Mr. Chair, may I just say something in response? I think we're focusing on tariffs, and tariffs are important for movement of goods. The opposition to the TPP terms has never been on tariffs. You can expand markets, you can drop tariffs and allow people to sell, and the devil is in the detail, the regional value content.

International Trade committee  I have a quick thought on the increased investment by the Japanese and Koreans. Koreans deal with the Korean accord. This deal is about movement of product, and so this deal makes it easier for product made in Japan or in other countries outside of North America to flow into Canada.

International Trade committee  I have two separate thoughts. Renegotiation, I think, isn't on the table. I do think there are some side agreements to this deal that I'd like to see someone challenge. Those side agreements do things like deal with snap-backs and safeguards and tariff elimination schedules. You know, the premise for Canadian manufacturers, both small and medium-sized ones....

International Trade committee  We've been very clear. We were very clear with the former government. We're very clear with the current government. If NAFTA partners are in, we need to be in the TPP. That doesn't mean we think the TPP terms are good; it just means that's the lesser of two evils.

International Trade committee  Auto manufacturing is a very localized endeavour. If you think about auto parts travelling to other markets, they go in volume and they go just in time. They don't cross the Pacific by themselves; they cross the Pacific in a car.

International Trade committee  That's an interesting premise that gets put out there by a lot of people who have appeared here before, saying the terms are weak, but everybody else signed on, so we should be on or else it's a problem.

International Trade committee  Good morning, Mr. Chair and honourable members. I'm pleased to join you today. I would like to thank you for this opportunity to share with you our views and perspectives about the impact of the Trans-Pacific Partnership on Canadian automotive parts manufacturers and to discuss the best course of action for the Government of Canada in the final ratification phase of this process.

Finance committee  Inasmuch as you're exposed to an American customer dealing in their currency, there is a momentary capture, but those customers also then turn around. What we talk about is that customers will look at what we sold them this year and then ask for give-backs. Then when they price the next program, they like the lower dollar as much as you do.

Finance committee  Yes. They've learned to hedge over the years, but there were structural differences up until maybe 10 years ago. We were dealing with a 62¢ to 65¢ Canadian dollar and lots of Canadian final assembly production. Then the world fell apart. Now everybody understands that if you're going to survive, you have to hedge.

Finance committee  You also hedge with your production, geographically, and hedge on currency from your operation within Canada, both on buying and on selling.

Finance committee  There are a host of factors. If I wanted to serve a customer that assembles in Tennessee, I might decide to set up a plant in Tennessee and serve that customer there as a Canadian company but with a Tennessee footprint. The same could be said for Coahuila. That helps buffer the currency that our customers are already hedging just on a transactional basis.

Finance committee  On a declining scale I'd replace three with dozens, but in terms of important currencies, the North American ones are the ones we're primarily dealing with, that is, with the addition of the euro.

Finance committee  Sure. I think there's a contrast that has to be made in manufacturing in the primary industries and the secondary industries. If you're deriving goods from primary industries in market and you're dealing in Canadian currency, it's one thing. On the secondary industries we're assembling subproducts and inputs from not just the U.S., but from European, Asian, and South American origins.

Finance committee  That's right.