The Truth About Cars » FTA The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. Sun, 20 Jul 2014 16:00:00 +0000 en-US hourly 1 The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars no The Truth About Cars (The Truth About Cars) 2006-2009 The Truth About Cars The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars » FTA EU Denies French Requests To Monitor Korean Auto Imports. GM Relieved Tue, 23 Oct 2012 10:46:30 +0000 The EU sent a warning shot across the bow of protectionist France. Brussels refused France’s request to monitor car imports from South Korea. According to the Wall Street Journal, import surveillance could have been Europe’s first step toward blocking or reversing tariff cuts instated by a free trade deal between the EU and Korea.

The French government and Fiat lobbied hard for a reversal of the free trade agreement with Korea, and against an FTA with Japan. The European Commission expressed its sympathy with the plight of European automakers, but warned against a myopic view of the matter. “In general, trade figures more than one year after the entry into force of the agreement are rather encouraging and indicate that the EU mostly benefited from this FTA so far,” EU spokesman John Clancy told Bloomberg.

The decision is also a warning to UAW supporters who lobby hard against free trade agreements and for closed borders. Be careful what you wish for. Oddly enough, import restrictions on cars coming from Korea to Europe would hurt GM. Most of Hyundai cars sold in Europe are made within the EU. Kia and GM are responsible for most of the imports from Korea. GM’s Chevrolets sold in the EU are nearly all made in Korea.

Politicians should be kept away from the car business.

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Marchionne Calls For EU Intervention, End Of Free Trade Wed, 10 Oct 2012 17:39:49 +0000

It looks like Fiat and Chrysler CEO Sergio Marchionne does not want to be head of the European automakers association ACEA much longer.  Today, he called for a massive EU rescue package for the ailing European car industry, with coordinated capacity cuts as the centerpiece.  He also called for a stop of free trade agreements. “Let the European car industry make its adjustments… This is not the time to embrace free trade,” Marchionne said while Reuters was taking notes.

Earlier this year, Marchionne had called for a massive government intervention that would require all automakers to shed capacity, most likely with financial support from Brussels. At the time, an anonymous European auto exec predicted serious pushback from the German side, which is doing just fine, danke. The German side did not waste time. To the delight of the EU, which has other problems, the German members of the ACEA did not support Marchionne’s plan, and it went nowhere. They also started working on Marchionne’s ouster. Soon thereafter, Volkswagen demanded that Marchionne step down as the head of the lobbying group, after Marchionne accused Volkswagen of dumping.

Last month, Marchionne said that ACEA’s board agreed all members would reach their own decisions. He also hugged Volkswagen CEO Martin Winterkorn in front of cameras. “They hugged, but they did not kiss,” quipped  Daimler CEO Dieter Zetsche.

All of this seems to be forgotten, and Marchionne calls for the strong arm of Brussels again.  Marchionne also said the EU should delay signing free trade agreements. When he said this before, it earned him a serious rebuke from EU Trade Commissioner Karel De Gucht. Export-heavy German carmakers and export-heavy EU states are for FTAs. It seems like Marchionne is under a lot of stress, and the way he is going, he might be under more stress soon.

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Obama And Lee At Orion: Free Trade Sucks, But It Beats The Alternatives Sat, 15 Oct 2011 18:45:45 +0000

In many ways it was a strange scene. The president of Korea, speaking in a US factory that builds the replacement to a car that was once imported from Korea. The president of the United States, speaking in a factory that can only competitively build subcompact cars because of a government-ordered “innovative labor practices” that unionized workers were not able to ratify. In many ways, both President Obama and President Lee were visiting the graveyard of their ideals. Which is another way of saying, that this meeting symbolizes a new pragmatism.

American workers may not be getting paid what they once were, but they’re building cars at a profit. Korea may not be exporting as many cars to the US, but it’s putting the squeeze on Japan. Professor Kim Seung-jin of Hankuk University sums up the dynamic in the Korea Times, saying

There is no free lunch in the world… Korea should get into the U.S. market prior to Japan and China. The more we delay the less the advantage. You should know that the world is still living off the American market

This deal probably won’t boost US auto exports to Korea in the way Obama is hoping for, but it’s a reminder that US manufacturing is slowly becoming more competitive… and that our market remains an attractive place to do business. Free trade is necessarily a messy business for politicians, and protectionism might have kept Orion’s wages higher or Aveo production in Korea. But by embracing free trade, these two presidents could walk into Orion, live up to the downsides of free trade, and promise a stronger, more sustainable economic future.

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