U.S. Set for Trade Fight With Seoul : Asia: Washington expects help from Europe in getting South Korea to open up its auto markets.

WASHINGTON — The United States is preparing for another trade skirmish over automobiles--with South Korea, not Japan--and it expects support from its European trading partners this time around.

Talks with Seoul have produced few results in unlocking South Korea’s car market to imports, U.S. officials say, adding that they were unsure whether progress could be made by Sept. 27, when U.S. Trade Representative Mickey Kantor will report to Congress on what trade actions he plans for the coming year.

U.S. and South Korean trade negotiators have met more than a dozen times since mid-1994 to try to resolve the dispute, and another round of talks is expected to be held in mid-September, officials say.

“We would much prefer an agreement to having to keep knocking on the door,” said Marie Kissel, senior analyst with the American Automobile Manufacturers Assn. “The Koreans have not moved for over a year and they need to be doing more. We think it’s time to review what the options are.”

The association, which represents the Big Three U.S. auto makers, asked Kantor to put South Korea on a priority list for action that could lead to U.S. sanctions if no progress is made on opening its market to foreign car imports.

It was this same process that started the ball rolling last year on the U.S. fight with Japan over car trade. The two sides reached agreement in late June after Washington moved to slap high duties on Japanese luxury car imports.

Kantor could move toward sanctions or take a complaint to the World Trade Organization in Geneva, which would probably gain more support from U.S. trading partners and produce less backlash in South Korea, trade analysts say.

The issues this time are different than they were with Japan. But U.S. officials say the end result is the same--a sanctuary market that keeps out foreign competitors while South Korean companies aggressively move into other countries.

One other difference, U.S. officials say, is that Washington is likely to enjoy more support this time from Europeans, who strongly criticized the United States in its auto fight with Japan.

Even Japan, which is virtually frozen out of the South Korean car market, will probably support the United States in a WTO complaint, officials say.

“Canada has already expressed an interest if we were to go that route . . . and I am sure the Europeans and the Japanese will both want a seat at the table if we were to go the WTO route,” a U.S. official said.

“I think that you will find that Europeans are very concerned about market access to Korea as well,” another said.

South Korea has one of the fastest-growing car markets in the world and the smallest penetration of imports, officials say.

The U.S. complaint against South Korea appears more clear-cut than did the one with Japan, when U.S. officials charged that a tangled web of regulation and cozy business relationships shut out foreign competitors.

In South Korea, a government-generated bias against imports and a complex set of taxes that can push the price of an imported car up as much as 110% work against foreign competitors, U.S. officials say.

“It bumps the price of a Mercury Sable or Ford Taurus into the Mercedes class,” an official said.

Financing restrictions on foreign car companies and leasing restrictions also thwart efforts by U.S. companies to make their cars more affordable in South Korea.

“The fastest-growing segment of the Korean market is the mid-size car, and Korean car companies are moving into that area,” the official said. “Our industry would like to be on the ground floor as that market takes off.”