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OPINION EXCHANGE | U.S. and Canada make cars together. Let’s not stop.

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As consul general of Canada in Minnesota, I’ve seen firsthand the benefit that comes from the unparalleled relationship between the United States and Canada, the strongest between any two countries on earth.

Communities in northern Minnesota share services with their neighbors in Manitoba and Ontario. Our federal, provincial and state governments cooperate with industry and nongovernmental organizations to protect our Great Lakes and other border waters. Our two governments recently signed a memorandum of understanding to further integrate the North American energy sector. Our highways, rail and shipping infrastructure cross the border seamlessly. Ontario and Minnesota recently completed a shared project to reconstruct the Baudette-Rainy River bridge. And our economies benefit from a $1.6 trillion annual trade and investment relationship — the largest and most comprehensive in the world, according to the U.S. Department of Commerce — that supports millions of jobs in each country.

As an example of this trading relationship, look no further than the auto industry. Through years of specialization and integration, our two countries now lead the world in producing cars, trucks and other vehicles. And as we fight climate change together, the U.S. and Canada are better positioned than nearly any other countries to become global leaders in zero-emission vehicles production.

Unfortunately, this future is at risk of stalling. A new tax credit for electric vehicles (EVs) proposed in the Build Back Better legislation, recently passed by the U.S. House and currently before the Senate, jeopardizes the U.S.-Canada automotive industry, violates the terms of the United States-Mexico-Canada Agreement (USMCA), and threatens to kill jobs in both the U.S. and Canada, including right here in Minnesota.

Right now, Americans and Canadians make cars together seamlessly. Indeed, we have been doing this for nearly 60 years. Companies on both sides of the border routinely trade parts back and forth five or six times before a final vehicle rolls off the assembly line. And because that integration is so well-balanced, Canadian-made vehicles already have on average about 50% U.S. content. In other words, Canadian cars are U.S. cars, and vice versa. That extends to all manner of vehicles; in Minnesota in 2019, according to Statistics Canada, Canada bought more than $119 million worth of Minnesota-produced vehicle parts. Overall, the $100 billion in automotive trade that the U.S. and Canada do each year helps to sustain 1.1 million good-paying jobs, many of which are unionized.

Unfortunately, there are elements in the tax credit proposed in the Build Back Better legislation that would throw a wrench in the economics of our shared industry. As the bill is currently written, Canadian-assembled vehicles will not be eligible under the tax credit. This disrupts integrated supply chains, creates enormous uncertainty around cross-border trade, and risks jobs in the U.S. that are supported by orders from Canada. If the U.S. proceeds with the tax credit provisions as drafted, Canada will have no choice but to respond forcefully by launching a dispute settlement process under the USMCA and applying tariffs on various American imports.

Shutting out Canada just doesn’t make sense. Like the U.S., Canada is dedicated to a zero-emissions vehicle future in North America. Earlier this year, our leaders agreed on a plan to make our two countries the global leaders in EV battery production — and Canada is the only country on the continent with all the critical minerals needed to make batteries for use in EVs. North America cannot afford to lose our global competitive edge on EVs, and Canada is integral to that goal.

We do not wish to go down the path of confrontation, least of all with our closest ally and neighbor, but there is still time to find a solution. Members of Congress, particularly in the Senate, are debating the details of this EV tax credit right now. Let us encourage them to find a solution that preserves the integrated Canada-U.S. automotive market so we can shift into high gear and, together, win the race on EVs.

Ariel Delouya is consul general of Canada in Minneapolis, covering Minnesota, Iowa, Nebraska, North Dakota and South Dakota.



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