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FOCUS : Curbs on Japanese Car Imports May Be Sought : Auto: Two lawmakers consider introducing legislation that would set limits on the Asian nation’s vehicle sales in the United States.

From Reuters

Two congressmen with large voting blocs in car-making states are considering trade bills that would include curbs on auto imports from Japan, industry sources say.

Japan holds 30% of the U.S. car market, much of which has come at the expense of General Motors Corp., Ford Motor Co. and Chrysler Corp.

At the same time, the sources said late last week, Detroit is weighing filing a “dumping” complaint against Japanese luxury cars, which are increasingly eating into their profits.

If Japan is found to be dumping the cars by selling them below cost, duties would be assessed to bring the prices up to their fair production cost.

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The bills, sources said, are being written by Democratic Sen. Donald Riegle of Michigan--who represents the heart of the American car industry--and Rep. Richard Gephardt, a Missouri Democrat whose district is also a major car assembly area.

Aides to the lawmakers would not comment on a newspaper story that such bills were being considered, but the industry sources said curbs on Japanese cars might be similar to those that the 12-nation European Community has imposed on Japanese auto imports.

That agreement allows Japanese car imports to rise slowly--to enable European makers to modernize and better compete--from the present 11% to 16% in 1999, when the restrictions would end.

There was no immediate indication of how much support any quota legislation might receive from Congress.

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A Bush Administration official said he would not comment on proposed legislation but that quotas could be counterproductive and increase prices to consumers.

Another official said the Administration’s longtime opposition to car quotas has not changed.

They noted that the existing quotas on Japanese cars were set by Japan.

The quotas limit Japanese car shipments to 2.3 million units a year, but the level has never been reached because Japan builds some of its cars in the United States.

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Most of its luxury cars, however, are built in Japan.

Despite growing concern over Japan’s continuing U.S. trade surplus and repeated charges of unfair trade, a quota bill would have difficulty becoming law, congressional aides say.

Consumer groups argue that quotas would increase costs to car buyers. Plus, many lawmakers represent districts that benefit from imports, including East and West Coast port cities.

If approved, a Bush veto of the bill would be all but certain.

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The anti-dumping complaint would be similar to one that the U.S. companies filed against Japanese minivans May 31.

The Big Three alleged that Japanese companies had increased their share of the U.S. minivan market to 12%--up from 4% three years ago--by means of unfair pricing.

In their preliminary rulings, the Commerce Department and the U.S. International Trade Commission voted against Japan. If the preliminary findings are upheld later this year, duties would be imposed on the minivans to make up for the alleged dumping.

A new anti-dumping case would target the fast-growing Japanese luxury car market in the United States.

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This year, sales of Japanese luxury cars--Honda’s Acura, Nissan’s Infiniti and Toyota’s Lexus--are up 12% from a year ago. Big Three luxury sales are down 11%.


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