Korean ambassador says U.S. auto imports should increase - The Detroit News

Ambassador Han Duk-soo told the Detroit Regional Chamber of Commerce that the agreement "will actually make things better, not worse, for the auto industry and its workers," according to a copy of his remarks provided by the Korean Embassy in Washington.

 

He argued the deal "will open fully an increasingly affluent consumer market to U.S. automakers by erasing the 8 percent tariff they pay on all their exports to Korea while the U.S. will eliminate its tariff of only 2.5 percent."

 

Both Ford Motor Co. and Chrysler Group LLC say more changes must be made to open the market to U.S. imports. The ambassador will hold meetings with senior executives at both companies today and attend a dinner at the Henry Ford Museum.

 

The automakers argue that without more safeguards, other barriers beside tariffs will continue to keep the number of U.S. auto exports to Korea low. Last year, just over 7,000 U.S.-built vehicles were purchased in Korea, versus more than 411,000 exported to the U.S.

 

Ambassador Han acknowledged that within the U.S. auto industry "that it will dramatically increase auto imports from Korea; that Korea's auto market is heavily protected by so-called non-tariff barriers and the (agreement) does nothing about them; and that it is an unfair deal overall."

 

He said those beliefs "are unfortunate misunderstandings."

 

The Bush administration signed the agreement in April 2007, but it hasn't been ratified by Congress. President Barack Obama said in June he wants U.S. and Korean negotiators to address concerns by November in order to allow ratification by early next year.

 

The ambassador acknowledged that the company's auto market once was "protected. But that time is long gone, and the current perception is not based on current realities."

 

Ambassador Han noted that since 2000, auto imports to Korea increased on average 40 percent each year, reaching 7.2 percent of market share by 2008. But it's still far less than most major auto markets.

 

"As the Korean Ambassador to the United States, I would like to see more Ford, Chrysler and GM cars in the streets of Korea than other foreign cars. And we know from experience that if we work together we can make that happen," he said. "In fact, the outlook for U.S. auto sales in Korea is already improving. Ford's April 2010 sales in Korea were more than double what they were in April 2009, thanks to the popularity of the 2010 Taurus, the fifth-best-selling import car in Korea so far this year and the best-selling in its class."

 

Ambassador Han called that "encouraging, but American car sales in Korea can and should be increased a lot more." Ambassador Han argued that by ending the 9 percent tariff on autos for U.S. companies, it will give them a leg up on other imports.

 

General Motors Co. -- which owns a Korean car company, Daewoo, has stayed neutral on the free trade agreement.

 

He said, "Korea will effectively adopt California's emissions standards. American cars that comply with them will be regarded as complying with Korean standards. Korea also made concessions on safety standards."

 

Ambassador Han sought to note Korea's large role in U.S. employment, with Korean automakers employing more than 80,000 Americans, including at Hyundai and Kia dealers.

 

Hyundai and Kia Motors buy annually $900 million in automotive parts and components from Michigan suppliers, he said, and many Korean investments are in Michigan.

 

The free trade agreement would also help Michigan farmers, Ambassador Han said.

 

Michigan is also a major producer of grapes for grape juice, he said,which faces a 45.5 percent import tariff in Korea.

 

Mike Manley, head of International Operations for Chrysler, is meeting with Ambassador Han later today.

 

"Chrysler is encouraged by the Obama administration's current negotiations to address the serious concerns the auto industry has expressed regarding the auto provisions," the company said in a statement. "We understand that an open and growing trading system is the future of our company and of the U.S. economy, and support an enforceable agreement that provides meaningful market access for imported autos into Korea."

 

Source: The Detroit News