U.S. Automakers Voice Opposition To Trade Deal With South Korea

Domestic automakers say trade deal does not go far enough in opening Korean market to U.S. auto industry.

WASHINGTON (AP) - Domestic automakers said Monday they would oppose a U.S. trade deal with South Korea because it failed to do enough to open the Korean market to the U.S. auto industry.

Both Ford Motor Co. and DaimlerChrysler AG's Chrysler Group said they were ''extremely disappointed'' with the deal, which involved both sides cutting and phasing out tariffs on automobiles.

South Korea also agreed to change its auto tax system for larger vehicles, which the U.S. has said is discriminatory. Auto industry officials said they were still awaiting specifics on the agreement, the United States' largest trade deal since the North American Free Trade Agreement was signed in 1993.

''The Korean government missed its last, best chance to undo the protectionist policies that over the past two decades have kept the Korean auto market off limits to all manufacturers - U.S., Japanese and European,'' said Steve Biegun, Ford's vice president for international governmental affairs.

''This agreement should not be approved by the Congress in its current form,'' Biegun said.

Long-term, the trade deal would keep in place certain non-tariff trade barriers such as discriminatory taxation against imported vehicles and unique emissions requirements that have made it difficult for foreign automakers to enter the South Korean market, Biegun said.

Chrysler officials noted that ''while we have supported every free trade agreement negotiated by the U.S. government, we will not support this agreement as we currently understand it.''

South Korea, where Hyundai Motor Co. and Kia Motors Corp. are based, sells more than 700,000 vehicles a year in the U.S., compared with about 5,000 vehicles sold by U.S. automakers in South Korea.

Several supporters of the auto industry in Congress signaled their opposition. Rep. Sander Levin, D-Mich., noted that ''the Koreans got what they wanted,'' including the immediate elimination of the U.S. tariff on most automobiles and on all auto parts. Tariffs on trucks would also be removed eventually.

But the congressman said the U.S. ''did not get what was needed - an agreement that assures that the U.S. automotive industry will no longer face the barriers to their products, that trade will be truly a two way street.''

Sen. Debbie Stabenow, D-Mich., said the deal would hurt domestic automakers by allowing the imbalance of U.S. auto sales in South Korea to continue. She vowed to ''do everything in my power to defeat this agreement and ensure that any future fast-track authority includes provisions guaranteeing that American businesses and workers can get a fair deal.''

Sen. Carl Levin, D-Mich., called the agreement ''a gift to the Korean auto industry at the expense of our auto industry at home.''