ABSTRACT
Canada’s policy measures that attracted investments from non-regional producers again formed a triangular diplomacy dynamic that favored the Canadian auto industry. The interdependence between the Canadian auto industry’s and the US Big Three’s interests was such that offering special conditions to non-regional producers to enter the Canadian market would hurt the US Big Three as much as the Canadian auto industry. But, by attracting non-regional auto investments, Canada forced the US Big Three to enhance the industry’s competitiveness and to end the limitations that the oligopolistic competitive dynamics had traditionally placed on the industry’s full rationalization. In this round of triangular diplomacy, the US Big Three joined the US government, demanding both an end to the special programs offered by Canada to Asian producers and more protection for their regional system of automotive production.
