EU, U.S. automakers condemn S. Korean 'frugality' campaign

Asian Economic News, March 6, 2000

BRUSSELS, Feb. 29 Kyodo

European and American automakers have condemned the South Korean government's latest campaign urging the people to be "frugal" as the "most surprising and unfortunate episode in a long history of nationalistic anti-import initiatives."

In a joint statement issued late Monday, the European Automobile Manufacturers Association (ACEA) and the U.S.-based Automotive Trade Policy Council (ATPC) expressed "grave concern" over recent remarks by South Korean President Kim Dae Jung that called on the public to join in a drive to maintain Seoul's trade surplus this year through voluntary frugality.

They quoted Kim as saying that although an official "forcible anti-import drive" would be impossible due to foreign pressure, the public must be warned that imports are growing "too fast."

The statement said this is in direct conflict with South Korea's commitments made in the framework of the World Trade Organization (WTO) and the Organization for Economic Cooperation and Development (OECD).

It also breaches Seoul's commitments made to the European Commission, the executive body of the European Union (EU), and the 1998 automotive agreement with the United States, it said.

The European and American automobile associations said it is "particularly unacceptable" because South Korea is "enjoying the benefits of open markets" in Europe and North America, exporting more than 1 million vehicles there last year, while keeping its domestic market closed.

In 1999, only 2,401 imported automobiles were sold in the South Korean market, for a market share of 0.19%, they said.

"This is a blatantly unfair and discriminatory trading pattern, which must be addressed by top Korean officials," the statement said.

The ACEA and ATPC said they will be meeting with U.S., EU and South Korean government officials in the coming weeks to "strongly protest this very unfortunate new development" and seek "immediate and public reversal" by the South Korean government of it anti-import policies.

The latest statement criticizing South Korea is the second of its kind this year made jointly by the two groups.

Last month, the ACEA and ATPC rapped South Korea for maintaining one of the world's most closed and protected markets for foreign vehicles while exporting a record number of cars to the EU and U.S.