U.S. Report Says Weak Japanese Economy Undercuts Auto Agreement
12 August 1998
U.S. Report Says Weak Japanese Economy Undercutting Auto Agreement
WASHINGTON, Aug. 12 -- A U.S. government report released
today asserts that "continuing U.S. market access concerns in the automotive
sector have been overlaid by serious concerns about Japan's recession." The
official semiannual review of the 1995 U.S.-Japan automotive trade agreement
cited lower Japanese consumer spending and business investment, as well as the
weakened yen, as causes for Japanese auto sales falling for 16 straight
months, which the report says "has disproportionately affected foreign
automakers."
American Automobile Manufacturers Association (AAMA) President and CEO
Andrew H. Card, Jr., said the report, jointly prepared by the U.S. Department
of Commerce and the office of the U.S. Trade Representative, "confirms the
industry's view that progress made during the first year of the agreement has
eroded completely as the Japanese economy has weakened. Japan should not use
its economic troubles as an excuse for ignoring obligations under the trade
agreement. We appreciate the continued efforts of our government to hold
Japan to the terms of the agreement."
The 1995 agreement between the U.S. and Japan pledged the two countries to
measure both qualitative and quantitative improvements in access to Japan's
markets for autos and auto parts. "Total auto import share actually is lower
today, at 4.8 percent of the Japanese market, than three years ago when the
agreement was signed," said Card. "And we are still waiting for Japan to
deliver on promises of deregulation and more openness in the country's
dealership system."
"Clearly, the expectations anticipated under the 1995 Agreement are not
going to be met," Card said. "Japan's government should focus on restoring
its economy to vitality. The Japanese government's weak and hesitant response
to its economic crisis is spreading instability around the world. The
government of Japan should get its own house in order as quickly as possible."
Instead, Card said, "Japan is trying to export its way out of its
problems. Japan's exports to Canada, Europe, and Latin America are exploding.
This is a special concern in the Canadian market, where Japanese imports
compete with North American-produced products with high U.S.-content."
In addition, Card noted that Japan recently filed a complaint with the
World Trade Organization (WTO) challenging the 1965 U.S.-Canadian Auto Pact as
a trade barrier -- a move that AAMA strongly opposes. "Japan should
immediately withdraw the ill-timed WTO complaint."
AAMA is the trade association whose members are Chrysler Corporation
, Ford Motor Company and General Motors Corporation
. Visit AAMA's site on the World Wide Web at http://www.aama.com.
Japanese Motor Vehicle Exports, in units
Destination Jan-June 95Jan-June 96 Jan-June 97 Jan-June 98Change,97-98
Asia 301,717 312,033 316,942 141,194 -55.5%
Middle East 100,689 123,736 149,295 179,883 20.5%
Europe 455,271 478,543 589,370 699,501 18.7%
Canada 50,230 34,170 57,150 77,224 35.1%
U.S. 724,947 518,806 634,394 646,682 1.9%
Latin America 201,597 139,213 196,941 255,719 29.8%
Africa 71,728 66,836 89,016 86,553 -2.8%
Oceania 145,535 130,340 141,421 173,561 22.7%
Other 2,795 4,314 5,064 4,356 -14.0%
U.S. Automakers' Imports to Japan, in units
Jan-July Jan-July Jan-July Jan-JulyChange,
95 96 97 98 97-98
All Vehicles 54,698 74,671 63,137 42,329 -33.0%
U.S.-built
vehicles 32,581 46,301 37,900 26,228 -30.8%
Total Vehicle
Sales in
Japan 4,172,588 4,236,943 4,203,008 3,605,895 -16.6%
U.S. Market
Share 1.3% 1.8% 1.5% 1.2% -0.3%
Sources: JAMA, JAIA N.B. U.S.-built vehicles exclude Fords built in
Germany and GM Opels built in Europe. U.S.
automakers' imports do not include Japanese
nameplates built in the U.S. and sold in Japan.