November 22, 2008

Doha talk worries US auto and steel groups

It is reported that US automakers, now facing their worst sales slump in 15 years are nervously eyeing world trade talks they fear could open the US market to more imports without giving their exports a boost.

The automakers' anxiety is matched by concerns in the US textile and steel industry as world trade negotiators prepare to take what many believe is a high stakes gamble to bring the nearly seven year old trade round to a successful close.

US Trade Representative Susan Schwab and top trade officials from Europe, India, Brazil and other leading World Trade Organization members will gather in Geneva the week of July 20 to try to strike a deal. If they fail, it could be the death blow for the long struggling round or at least knock it out for years.

The United States which has a 2.5% tariff on passenger cars and a 25% duty on light trucks, imported USD 245.8 billion of autos and auto parts last year but exported only about half that amount or USD 124.3 billion.

Mr Steve Collins president of the Automotive Trade Policy Council, which represents General Motors Corp, Ford Motor Co and Chrysler LCC in an interview said that "We are worried about the direction it's taking. We wish our negotiators the best, but we are worried.”

Mr Collins said that he feared the Bush administration could agree to a Doha deal that slashes remaining auto tariffs in the United States and other developed country markets, while letting big developing countries like India, Brazil and China exempt their own auto sectors from tariff cuts. He added that US automakers are also disappointed that WTO negotiations on reducing foreign tax and regulatory barriers to US auto exports have gone nowhere.

Mr Scott Paul executive director of the Alliance for American Manufacturing said that “US steelworkers and many small to medium sized manufacturers fear an agreement could weaken the United States' ability to impose anti dumping or countervailing duties on imports it believes are unfairly priced.”

He added that "Every successful round of WTO negotiations has further weakened US trade remedy laws and we know, based on the submission of many trading partners, that there is a strong desire to further scale those back.”