U.S. carmakers pressure Seoul for easier market entry
Pressure is heating up on Seoul to ease market entry by U.S. auto companies ahead of the opening of formal bilateral free trade agreement talks in June.
According to a report by U.S.-based “Inside U.S. Trade” published on Saturday, American car companies have launched an anti-Japanese and Korean car campaign through TV commercials that began airing Thursday. It also said the Washington, D.C.-based Automotive Trade Policy Council is urging the Office of the U.S. Trade Representative to secure an FTA pact that ensures wider access to Korea’s auto market.
Korea, the seventh-largest trading partner of the United States, would be the biggest economy Washington has a trade pact with since it concluded the North American Free Trade Agreement with Mexico and Canada in 1994. American car companies have been struggling with low popularity of their vehicles in the Korean market.
Seoul and Washington agreed on Feb. 3 to enter formal FTA negotiations, with their first round of official talks set to take place from June 5 to 9 in the U.S. capital.
According to the latest U.S. trade report, its auto industry is calling for auto import tax reforms in Korea as American auto manufacturers feel more deterred by the imposition of a layer of taxes and rigorous safety standards than the import tariffs.
Charles Uthus, the ATPC vice-president, is reportedly cooperating closely with the USTR to ensure Korea’s wider market opening. Inside U.S. Trade highlighted that Uthus said that it would be difficult for the American auto industry to support an FTA with Seoul until it sees written proof of reform in the Korean auto market.
The official also strongly requested for more than a promise by the Korea government on easing its tariff and nontariff trade barriers, especially because Seoul failed to meet earlier pledges to eliminate trade barriers, which were made through two memorandum of understandings.
Even if the elimination of tariff and nontariff barriers apply to Japanese cars manufactured in the United States, Uthus stressed with confidence that American cars would be able to compete with other foreign carmakers.
Further reflecting America’s anxieties over intensifying global competition with Japanese car brands, such as Honda and Toyota, Uthus cited anti-Japanese sentiment in Korea as one factor for the prospects of low demand for Japanese cars.
Meanwhile, retirees of the Big Three U.S. automakers launched a campaign to make Americans think twice about buying a foreign car.
“While foreign automakers own more than 40 percent of the market, they employ only 20 percent of the workers,” Jim Doyle, president of Level Field Institute, said at a news conference on Thursday to roll out more than a $1 million ad campaign targeting Washington policymakers.
Level Field, created by retirees of U.S. auto companies, is supported by Detroit automakers. Mike Moran, a spokesman for Ford, said his company had made “a contribution” to Level Field. “We’ve just supported this grassroots effort that these people have undertaken.”
Doyle said each foreign auto purchase by American consumers supports half the jobs (that) buying a Ford, GM or Chrysler does.
Doyle said he is not out to bash foreign automakers, but U.S. car companies have long been frustrated about the difficulty of selling cars in Japan and other Asian markets.
Last year, U.S. imports of cars, trucks, and auto parts outstripped exports by about $138 billion. The automotive trade deficit totaled more than $50 billion with Japan and nearly $11 billion with Korea.
(sohjung@heraldm.com)