In the early 1960s, the Canadian automobile industry faced a growing crisis linked to a seemingly uncontrollable decline in the production and sales of American-branded vehicles, which were a major industry in southern Ontario. Several domestic and international factors contributed to this economic crisis and the task of stabilizing it fell to the federal government. Official investigations were initiated and several economic policies were put in place to help remedy the situation, but it was not until the monumental passage of the Automotive Products Trade Agreement of 1965 (APTA), signed by the Prime Minister Lester B. Pearson and President Lyndon B. According to Johnson, a significant reorganization of the entire North American automobile sector could take place. Commonly known as the Auto Pact, this treaty essentially allowed free trade in automotive products across the Canada-US border, provided certain industry requirements were met. By analyzing the history and weaknesses of the Canadian auto industry in the late 1950s and early 1960s, this essay will argue that the Auto Pact was a necessary restructuring of the North American auto industry that has inherently benefited Canada's continental auto trade with the United States. The Auto Pact of 1965 was a free trade agreement that allowed the movement of auto parts and finished vehicles across the border, duty-free, provided that auto production levels did not fall below 1964 levels, essentially preserving the Canadian auto industry. . Before the deal, the auto manufacturing sector was in a state of uncertainty; plagued by declining exports and an influx of imports, both overseas and south of the border,...... middle of paper ......ada-American Auto Pact of 1965 : an experiment in selective trade liberalization. Rev. Paper presented at the Conference on Business and Industrial Organization, Mérida, Mexico, December 16-18, 1985. Hazledine, Tim, Ian Wigington. "Canadian Auto Policy." Canadian Public Policy / Analyze de Politiques 13 (1987): 490-501. Reed, Beverly. The Canadian automobile industry before the Auto Pact. Toronto: Canadian Broadcasting Corporation, 1978. Online radio clip. Pearson, Lester B. A Continental Automobile Industry. Texas: Canadian Broadcasting Corporation, 1965. Online radio clip. Thomas, Kenneth P. “Capital Mobility and Trade Policy: The Case of the Canada-US Auto Pact.” Review of International Political Economy 4 (1997): 127-153.White, Richard. Making Cars in Canada: A Brief History of the Canadian Automobile Industry 1900-1980. Ottawa: Canada Science and Technology Museum, 2007.