the following is an editorial from the Globe and Mail newspaper, based in Toronto:

"DaimlerChrysler is annoyed with its own customers. It seems Americans have been arranging to get DaimlerChrysler cars and trucks from Canadian dealerships, whose prices are as much as 25 per cent lower than U.S. prices for identical vehicles. DaimlerChrysler is so bothered by this so-called grey market that it has decided to stop honouring warranties on cars and trucks that are bought in Canada but end up in the United States.

DaimlerChrysler and the other Big Three auto makers have grown increasingly concerned about this cross-border phenomenon, which isn't illegal and is entirely consistent with the North American free-trade agreement. This is the same Big Three that have thrown their considerable weight around for decades to gain an open, integrated North American automobile market.

The Big Three like to freely move parts and vehicles across borders for added flexibility and cost savings. They like to build plants in the most cost-efficient locations and shut down inefficient facilities, a trend that in recent years has often left the companies' Canadian operations holding the short end of the stick. Strangely, though, it turns out they don't like the retail side of their markets to function without borders.

History suggests that the conditions that have allowed the grey market to grow will correct themselves without rash actions by the Big Three. In the early 1990s, Canadians flocked to the United States in record numbers to shop for bargains, because high Canadian interest rates had resulted in an overvalued Canadian dollar that didn't accurately reflect its purchasing power relative to the U.S. market. That cross-border shopping crisis disappeared when the Canadian dollar sank to a level that more realistically reflected its relative buying power.

Now the pendulum has swung the other way. The Canadian currency has been significantly undervalued for too long, and doesn't reflect the country's improved economic efficiencies in recent years. Neither the currency nor the Big Three's vehicle pricing policies have caught up with Canada's strong economic fortunes, and the imbalance has manifested itself in the cross-border gap in vehicle prices.

The markets will eventually catch up, and the grey market will evaporate. In the meantime, DaimlerChrysler would do best to embrace the open borders it has long supported, rather than punish its own customers."