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Harper's Nodding Off at the Auto Industry Wheel

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Has anybody seen our old friend Stephen? Can you tell me where he has gone?

I guess Prime Minister Harper is busy finding a new finance minister along with all the other stuff involved with his single-minded pursuit of the Alberta carbon bubble. Because he sure doesn't have time to join the hand wringing over a key engine of growth in a once prosperous province called Ontario.

I'm talking about the so-called "free" trade agreement with South Korea and the future of the auto industry. After the tentative deal was announced last week hurrahs erupted from western Canadian farmers, whiskey makers did a jig, and some very important people waxed optimistic that Canada had scored a toehold in Asia.

And that's great as we need an economy firing on all cylinders. The auto sector, however, will soon begin misfiring as this deal comes to pass, according to Ford Canada, the union and the Ontario government. Can they all be wrong?

Ford Canada said it was just asking for a fair shot at the South Korean market as CEO Dianne Craig explained in a rather clear statement on why the deal didn't work for them:

Ford has proven that it can compete and win in the global marketplace when there is a level playing field. In fact, Ford's Oakville Assembly plant in Ontario ships to more than 50 countries today. But no Canadian manufacturer can compete with a market controlled by non-tariff barriers and currency manipulation. The trade agreement negotiated by the Canadian government with South Korea fails to address these issues.

Displaying his usual panache when dispensing bull waste, Harper mocked Ford's position: "So it is I don't think realistic for a company to think it will have one set of rules for it, and another set of rules for the entire rest of the Canadian economy."

Harper said Ford in the U.S. previously supported a similar deal so why wouldn't the company support it in Canada? One big reason: In the U.S. they believe the Koreans are using non-tariff barriers to block U.S. imports. The U.S., however, did negotiate a provision that would allow recourse if South Korea was found to be cheating, something that Canada didn't fight for.

So Ford just wanted equal access to South Korea's market, which is what a free trade deal should be all about. It is horrendous that Harper and Co wouldn't go the extra kilometer for the auto sector. We've had report after report describing how Canadian manufacturing has been walloped by the once high-flying currency and our friend wouldn't fight for an important industry at an opportune time.

The Canadian auto industry employs some 117,000 people in Canada, or about the same number employed in the Alberta tar sands. The union believes the Korean deal will be another nail in the coffin of the auto industry and could kill nearly 40,000 jobs. Would Harper ever agree to a deal that promised to rain such misery down on Fort McMurray, Edmonton and Calgary?

It takes effort to nurture and protect your manufacturing sector. Don't believe those who say only countries in Asia can build stuff cheaply and we should stick to exploiting our natural resources. Labor costs are only one component of manufacturing and some of those successful countries have been engaged in outright cheating with their currency and other measures to build up their home manufacturing bases.

Germany is the classic example of a western country that knows how to protect its industries. An example closer to home is the United States. They are starting to see a manufacturing revival for a host of reasons which could also benefit Canada, if we had a prime minister with a vision for Canadians beyond hewers of wood and drawers of water.

"Claims that manufacturing has lost its importance, that we should not be worried about its decline, that the prosperity of modern economies comes from services, and that exporting high-value-added services can secure earnings sufficient for importing all the needed manufactured goods are all wrong," the Canadian economist Vaclav Smil wrote in his seminal book, "Made in the USA."

But it takes attention and care to foster a revival in Canadian manufacturing. Canada needs sustainable development and these 21st century opportunities are as promising as they are challenging. But Harper and Co seem to have gone AWOL for any sector unless it can be dug from the ground.