The U.S. Customs Service ruled that less than half of the content of cars built by Honda Canada Inc. in Alliston, Ont., in 1989 and early 1990, and shipped to buyers in the United States, originated in North America. As a result, the cars do not qualify for treatment as domestic products under the Free Trade Agreement and are subject to a 2.5-per-cent duty. If the ruling survives an appeal by Honda, which had two weeks to respond* the company faces a $20-million bill for the unpaid duty and may consider leaving Canada. Meanwhile, Ottawa sent Washington a diplomatic note protesting the decision.
SUDS FROM SEA TO SEA?
Trade ministers from Quebec, Prince Edward Island, Saskatchewan, British Columbia and Alberta agreed to scrap rules that have prevented beer brewed in one province from being sold in another. The governments of the five other provinces are considering a similar step. The move to abandon protectionist provincial laws enacted in the 1920s followed an international trade ruling that will require the provinces to relax restrictions on foreign, mostly American, beer sold in Canada.
LABOR CALLS FOR CAR QUOTAS
Canadian Auto Workers union president Robert White called on Ottawa to impose quotas to limit Japanese automakers to 16 per cent of the Canadian car market in an effort to prop up domestic manufacturers. But General Motors of Canada Ltd. president George Peapples rejected White’s proposal and called instead for japan to open its own market to more exports of North American-built cars.
GO-SLOW WARNING FOR HIBERNIA
Investors in the Hibernia oilfield announced this week that work on the $5.2billion project off Newfoundland will slow dramatically after Gulf Canada Resources withdrew from the four-company consortium developing the field. At the same time, a second partner, Chevron Inc., said that it may also scale down its participation.
Giant fish processor Fishery Products International announced that it will lay off 1,000 workers in Newfoundland for at least three months, delivering another blow to the province’s battered economy. The company plans to lay off 855 workers at its plant in Catalina and the crews of 11 fishing vessels. Company managers said that those crews have found it unusually difficult to locate and catch cod this year.
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