Aftermarket Insider Issue 68 - (Page 15)

taCKlIng trade barrIers i N T E R N AT i o N A l F o C U S U.S.-Korean Free Trade Deal Tops Busy Congressional Trade Agenda The Obama administration’s trade team capped 2010 by successfully completing a U.S.-Korea Free Trade Agreement (FTA) that boosts growth opportunities for companies and workers in the U.S. aftermarket and other sectors. Revisions made to the 2007 agreement, signed by the Bush administration, include changes addressing concerns by U.S. auto maker and labor over the FTA’s automotive provisions. With strong bipartisan support, Congressional passage of implementing legislation is expected. The timing could be complicated, however, if the new House Majority insists on packaging the legislation with the implementing measures for the Panama and Colombian FTAs, also negotiated by the Bush administration, and both positive for the aftermarket. President Obama has not yet advanced those accords, which face major opposition from House and Senate Democrats. The Korean accord is good for world-class aftermarket companies, who compete especially well whenever tariffs and other trade barriers fall. • Korean and U.S. parts tariffs will immediately drop to zero. • Korea’s 8 percent car tariff and 10 percent truck tariff will be eliminated immediately (with some question at this writing about tariffs on U.S.made hybrids). the accord allows any u.s. auto maker to export up to 25,000 vehicles a year, that will be considered safety-compliant when imported into Korea, provided they meet u.s. federal safety standards. • U.S. immediately eliminates its 2.5 tion is issued and the time companies percent car tariff for engines 3.0 liters must comply, and requires Korea to or less, and over three years for cars develop a review system to ensure with larger engines. that auto regulations accomplish their objectives with minimal burden. • U.S. eliminates its 25 percent truck tariff in years nine and 10 of the accord. This is a major change to the 2007 text that would have eliminated the tariff over 10 years. The deal tackles longstanding Korean tax and technical trade barriers. Korea commits to reform its vehicle tax regime, based on engine size, as well and not impose any new engine displacement taxes. The accord allows any U.S. auto maker to export up to 25,000 vehicles a year, that will be considered safetycompliant when imported into Korea, provided they meet U.S. federal safety standards. The agreement prohibits Korea from adopting new automotive regulations that create unnecessary barriers to trade, and establishes an early warning system for potential trade barriers. The 2010 text adds two key features: creates a 12-month period between the time a final regulaIn addition to passing the FTAs this year, Congress and the administration should redouble efforts to conclude the Doha Round of the World Trade Organization (WTO) trade talks. Vehicle ownership is growing worldwide, and WTO tariff cuts and other market opening measures, could spur global consumer demand for quality aftermarket products. AFTERMARKET INSIDER | VOLUME 68 | 15

Table of Contents for the Digital Edition of Aftermarket Insider Issue 68

Aftermarket Insider Issue 68
Contents
President’s Message
The Automotive Aftermarket’s Green Story
Consumer Alert: FTC Responds to Warranty Misinformation
Government Affairs
Industry News
Member Profile
Toolbox: Downtime at Work
Toolbox
International Focus
Industry News
Technology Update
Market Intelligence

Aftermarket Insider Issue 68