Demand for Exceptions

The government is working on countermeasures against the US demanding for an increase in the quota.
The government is working on countermeasures against the US demanding for an increase in the quota.

 

An exemption quota regarding vehicle safety standards is emerging as a hot issue related to KORUS FTA revision.

“The U.S. is likely to demand an increase in the quota to at least 35,000 cars a year although no official request has been made yet,” said a South Korean government official, adding, “The government is working on countermeasures in that an increase in the quota is directly related to the people’s safety.” The Korea Automobile Manufacturers Association said that the demand is almost a fait accompli given that the U.S. has made similar demands over and over and it is opposed to the demand as an increase in the quota constitutes discrimination against South Korean automakers.

The companies point out that the demand for an increase in the quota is an attempt to neutralize it in that the current import volume is less than the quota set to 25,000 cars a year per automaker. The South Korean government is also saying that an increase in the quota can result in a higher likelihood of accidents.

At present, the number of cars South Korea imports from the United States each year is less than the quota. For example, GM’s sales volume in South Korea stood at 13,150 cars last year, approximately half of the quota. According to some in the industry, the U.S. government is likely to stick to its demand by threatening the South Korean government with GM’s withdrawal from the South Korean market. Four years ago, the South Korean government implemented stricter safety and environmental regulations, and then GM Korea halted the production of its small commercial vehicles Labo and Damas. As a result, the application of safety equipment regulations was postponed until 2020.

The U.S. government is expected to call for an exemption regarding greenhouse gas emission regulations, too. The Ministry of Environment of South Korea is planning to strengthen the regulations in stages until 2020 although cars imported from the United States are subject to more relaxed regulations now. “If the South Korean government continues to allow exceptions for U.S. automakers, it can have a hard time dealing with similar requests from European and Japanese companies,” said automotive engineering professor Kim Pil-soo at Daelim University College.

 

 

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