Japanese Issue Warning About Minivan Tariffs

Japan will invoke the General Agreement on Tariffs and Trade if what it calls a “protectionist” U.S. bill that raises the tariff on minivans becomes law, newspapers reported Sunday.

The U.S. House of Representatives on Friday approved a bill that would reclassify some minivans and sports utility vehicles as trucks, making them subject to a tenfold increase in import duties. The bill now goes to the Senate.

“This is clearly in violation of GATT,” the Asahi Shimbun quoted Japan’s Ministry of International Trade and Industry as saying.

It said that the fact that European cars were excluded makes it an unmistakable attack on Japan. MITI aims to present its case to GATT if the bill is passed, it added.

The bill makes two exemptions that critics say were designed to exclude European minivans. One provision would exclude from the tariffs minivans, such as Volkswagen, that have been imported since 1963. The other would exclude companies that sell fewer than 10,000 minivans a year in the United States, such as Britain’s Range Rover.

Japan’s leading financial daily, the Nihon Keizai Shimbun, quoted MITI as saying that it would urge President Bush to use his veto power to prevent the bill from passing. If the bill becomes law, Japan will ask GATT to intervene, the paper said.

The Bush Administration opposes the minivan reclassification on grounds that it would increase consumer costs, could be seen as a violation of GATT and could result in retaliation against U.S. exports. Bush is expected to veto the bill.