EU Denies French Requests To Monitor Korean Auto Imports. GM Relieved
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.
In the US, the unions are also hoping they can pressure the politicians to restrict free trade so they can pick the pockets of car buyers. Even Ford is hoping to put limits on the Japanese in current free trade talks. With Obama being voted out of office shortly, this strategy will not work in the US. The major car markets on the east and west coast will continue to turn away from Detroit brands until Detroit: 1) Begins to match Toyota and Honda in reliability; 2) Begins to match Toyota and Honda in long term durability; 3) Cuts prices to match Toyota and Honda pricetags. Free trade protects the average American from the UAW and from subpar overpriced Detroit products. Think about it ... what rational consumer would pay a premium for a Detroit brand that Consumer Reports and JD Powers exposes as an inferior product? Free trade works. Monday, TTAC had an article showing California turned their noses at nearly all Detroit products. Same on the east coast. Hopefully Detroit will fix their offerings and not hope for free trade restrictions.
In most Countries that have high level of unemployment, you can see this taking place, except the EU has a free trade deal with Korea, here in Canada we also will have a free trade deal with the EU, and so it goes!
@ Jimmyy "With Obama being voted out of office shortly..." - I wouldn't bet on it. "Monday, TTAC had an article showing California turned their noses at nearly all Detroit products. Same on the east coast"... - Can't speak to the northeast coast; definately not the case on the southeast coast.