Travels in Canada: Rules of the Road and the Car of Tomorrow

Each year, the automotive sector adds new and exciting technology to their fleets and showcases their prototypes to car enthusiasts across the globe. The future is indeed looking bright for car makers. But as in many industry sectors, technology and public expectations often run far ahead of government policy and rulemaking.

For autonomous vehicles, the overarching public and policy concern remains one of safety. For vehicles that can “see” the road ahead, an emerging issue is data privacy and data compatibility. For electric vehicles with greater and greater driving range, the challenge will be charging stations and the need to harmonize inter-state compliance requirements. These emerging market hurdles will work themselves out, likely through a mix of community engagement and legislation. But most can agree that a new driving experience by the millennial of today is light years away from the car our parents and grandparents parked in their driveways.  

For these reasons, an interesting public notice in the US Federal Register crossed our screen recently. The Office of the United States Trade Representative (USTR) published a notice on March 4th that a public meeting is to be convened on “the global steel industry situation” and its impact on US domestic interests. Why will this hearing be important to the auto sector, one asks? The answer may be obvious. Steel still represents about 65 percent of today’s vehicle content. Yes, steel. It’s hardly new-age or headline grabbing but steel remains a significant cost component and critical supply element for today’s automotive and parts manufacturers. 

Even as global demand for steel is dampening, world steel exports are on the rise. Citing a report from the Organization for Economic Cooperation and Development (OECD) Secretariat, global crude steelmaking capacity more than doubled from 2000 to 2014, largely due to “unprecedented” expansion by China, even though that same report estimated that demand for steel actually contracted by 5 percent in 2015 from the previous year.

Here’s the rub. This has not escaped USTR’s attention. The Register notice specifically cites the agency’s interest in the impacts of foreign trade barriers, unfair trade practices, “subsidies and other policies on US imports and exports of steel” and solicits “views on whether further enforcement tools or approaches, or legislative action (sic) are needed.”

Taking the broader view, it cannot go unnoticed that the public hearing in Washington will be held during an especially heated US election season. With candidates on both sides of the aisle expressing their positions on international trade, we can expect this hearing to generate media attention in the weeks ahead.

But perhaps more importantly, the hearing comes at a time when the World Trade Organization and its members are considering whether to formally recognize China as a “market economy” by the end of this year and how that change of status would affect the ability of WTO members to impose retaliatory duties on “dumped” Chinese steel.

And all of this action will take place as Washington and 11 other capitol cities move forward with efforts to ratify the Trans-Pacific Partnership and the pact’s far reaching automotive provisions and side agreements. For North American auto executives, many cards are in the air.

From Henry Ford to the executives at Google, making a car is more than moving people or goods from point A to point B. The making of a car is about the spark of imagination and the drive for new technologies. It’s focusing on the road ahead and not the rear view mirror.

So when engineering and design managers meet to plan their new prototype, they may wish to invite along some legal advice. The technology might be new, but international trade rules are still the stuff that keeps management executives up at night.