ITC: Curbing Car Imports Costs Consumers Billions

Limits on Japanese car imports have cost U.S. consumers $15.7 billion in higher prices on domestic and foreign cars since the middle of 1981, according to an International Trade Commission study released today.

The ITC report comes as the Reagan Administration weighs its position on the car trade agreement with Japan due to expire at the end of March.

Senior Administration officials have said they favor ending the arrangement under which Japan has voluntarily held down car shipments to the United States. But President Reagan has yet to make up his mind, government sources said.

The commission, a federal agency that monitors trade, prepared the study for a congressional committee.

It reviewed the impact of the voluntary restraint agreements that began in 1981 amid complaints from American car makers about Japanese competition.

Among its findings, the study estimated that 1 million more Japanese cars would have been sold in the United States last year alone--assuming Japan could meet that demand--if not for the agreements.

It also said that since 1981 there have been improvements in the U.S. car industry, including moderate advances in efficiency, employment, wages and profitability.

Japan, aware of the growing protectionist sentiment in the United States, agreed to hold its passenger car exports to 1.68 million units for the year beginning April 1, 1981.

Tokyo and the Japanese industry renewed the restraint agreement at the same level in 1982 and 1983.

The agreement was renewed again for last year with a higher limit and Japan kept its U.S. shipments to 1.85 million passenger cars.

Some U.S. government officials believe the Japanese industry may opt to restrict car exports in an effort to prevent Congress from taking the matter into its hands.

The commission study did not make a recommendation on whether the U.S. government should ask for another renewal.