Europe's car craziness; the European Commission's plan to limit Japan's market share in cars will hurt Europe more than Japan. (editorial)

Economist (US), The, December, 1989

What begins in fear usually ends in folly. Sure enough, fear of japanese competition in the car industry is driving the European Commission towards dottiness. After 1992, national barriers to imports of japanese cars into the 12 countries of the European Community will have to be scrapped, because they will become unenforceable. European carmakers have lobbied hard for a breathing

space-needed, they say, to prepare themselves for the Japanese. Now the commission has decided to replace quotas by asking japanese firms for a voluntary restraint agreement" (VRA) on car exports to Europe, perhaps until the late 1990s.

America has experimented with VRAs, with disastrous results. First, America's vRAs raised car prices, handing windfall profits to all...

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