Japan joined Trans-Pacific Partnership (TPP) free trade agreement talks late in July, so the US is sending Trade Representative Mike Froman to Japan on August 19 to negotiate ways to open up the country's auto import market in ways that will benefit all member countries, Politico reports. The TPP free trade deal, which involves countries like Singapore, Brunei and Vietnam – but not China – is set to close at the end of 2013.
Free Trade Agreement
Safety and emissions regulations have long been touchy subjects in the auto industry, because they can dictate the legality of automobiles and are not the same from country to country. Fragmented regulations add costs to vehicle sales, and they inhibit the ability of automakers to offer the same products around the globe.
France has been vocal, but not alone, in noting the rise of the South Korean automakers in Europe. The signing of a free-trade pact in 2011 between South Korea and the EU, along with the especially value-conscious buyers in a crisis-stricken Europe, has seen market share increases measuring in the double digits for Hyundai and Kia – analysts expect 14-percent growth for the two in 2012.
One of the French government's listed initiatives for aiding its ailing automotive sector, especially Peugeot, was asking the European Commission to keep an eye on imports from South Korea. The EU signed a free-trade agreement with South Korea last year, and France is concerned that might be exaggerating the loss of market share being suffered by its domestic makers – Europe-wide sales of South Korean cars rose by more than 20 percent last year in a market that is enduring painful contract
The powers-that-be in the States are working on getting the go-ahead for a free trade agreement, like NAFTA, but this time with South Korea. The agreement itself was signed and sealed in 2007, but it hasn't actually gone into effect yet because Congress won't approve it, and that's because of two hangups, one being emissions regulations that the U.S. maintains is a non-tariff barrier to selling cars in in South Korea.
Han Duk-soo, the South Korean ambassador to the United States, recently urged the Detroit Chamber of Commerce to embrace increasing automotive imports from his country. Talk about a tough sell. However, the move would be part of a deal that would open South Korea to cars built in America – a market that has been notoriously protected by tariffs and other barriers. Duk-soo said that eliminating America's 2.5 percent tariff on cars built in South Korea would allow his country to do away with
Talk to most analysts in the auto world, and they'll say that the recent rise of South Korean automakers like Hyundai and Kia have been an absolute blessing to the industry as a whole. Consumers now have an array of quality, inexpensive products, extra jobs have landed in rural areas of the deep south thanks to American-based manufacturing facilities and the competition from low-priced models have forced domestic manufacturers to up their game.