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Old 05-23-2013, 05:31 PM   #1
warpath
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Default Automakers Lining Up To Support US-EU Trade Pact

Autoblog: http://www.autoblog.com/2013/05/23/a...eu-trade-pact/



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The Detroit News reports automakers are coming out in support of proposed free trade legislation between the US and the European Union. The Association of Global Automakers, representing major Asian manufacturers, says the Transatlantic Trade and Investment Partnership will promote economic growth, increase jobs and make US and EU companies more competitive on the global market. The legislation will also open the door for EU and US regulators to agree on one standard for emissions, crash protection, child restraints, fuel systems and tire pressure monitors. If that happens, automakers could save millions of dollars by being able to build and sell one car for both markets.

Jaguar-Land Rover North America also stands behind that move, but would also like to see the US completely eliminate its current 2.5 percent tax on imported cars. The company isn't alone. Ferrari has also spoken up in favor of eliminating the tariff, and the Alliance of Automobile Manufacturers, comprised of Ford, General Motors, Chrysler, Volkswagen, Toyota and Daimler among others, also supports harmonizing regulations between both markets.

All told, the EU and the US make up 32 percent of global vehicle production and 35 percent of the total buyer market. The Detroit News reports the US exported some $8 billion in cars to Europe last year and another $5 billion in parts.
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Old 05-23-2013, 05:55 PM   #2
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If this passes they better have a stipulation that says they will pass those savings onto the customers... otherwise **** off. It makes sense, but I wouldn't put it past them to coerce with each other into keeping prices the same with no good global authority to stop it.
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Old 05-23-2013, 06:00 PM   #3
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see the US completely eliminate its current 2.5 percent tax on imported cars.
Tough.The feds need to eat too. Dont want to import taxe then bring your company to the states.
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Old 05-23-2013, 06:59 PM   #4
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Tough.The feds need to eat too. Dont want to import taxe then bring your company to the states.
The article also doesn't mention the tariffs/taxes imposed on US vehicles imported into the different European countries. If it's anything like Asia, then it's probably unfair to US automakers. In South Korea if you see someone driving a GMC Yukon, you know that person is either pretty well off or lives in a shack because they spent all their money on a US imported car. Taxes over there on imports are outrageous. I say if the country is going to tariff/tax US companies 80-100% of the price of the vehicle, we should do the same on their imports.
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Old 05-23-2013, 11:37 PM   #5
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The chicken tax is not on the cutting board?? Too bad, there's a lot of pent-up demand for compact trucks.
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Old 05-23-2013, 11:44 PM   #6
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Originally Posted by WRXHillClimb View Post
If this passes they better have a stipulation that says they will pass those savings onto the customers... otherwise **** off. It makes sense, but I wouldn't put it past them to coerce with each other into keeping prices the same with no good global authority to stop it.
Ummm.. you almost sound like you want a "global authority" to set prices.
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Old 05-24-2013, 12:06 AM   #7
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Ummm.. you almost sound like you want a "global authority" to set prices.
No, but I don't want the public to be stupid and just accept this kind of change and keep buying cars while taking it in the ass, which they will inevitably do. I support free economy when there aren't enormous ambiguous companies that could be practicing anti-trust stuff with no one wanting to step up and put them out of business for stepping out of line. My assumption is no one would even look into the possibility of these companies doing something sinister on the global scale. Who would? The UN? Lol.
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Old 05-24-2013, 12:35 AM   #8
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Originally Posted by WRXHillClimb View Post
No, but I don't want the public to be stupid and just accept this kind of change and keep buying cars while taking it in the ass, which they will inevitably do. I support free economy when there aren't enormous ambiguous companies that could be practicing anti-trust stuff with no one wanting to step up and put them out of business for stepping out of line. My assumption is no one would even look into the possibility of these companies doing something sinister on the global scale. Who would? The UN? Lol.
We are in agreement then. The fact that we have an increasingly global economy without having anything like a global government, or at least a global regulating body, is a very serious problem. But the car industry is probably one of the safer cases since they are already very heavily regulated all over the world.
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Old 05-24-2013, 12:58 AM   #9
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Originally Posted by CubeShin View Post
The article also doesn't mention the tariffs/taxes imposed on US vehicles imported into the different European countries. If it's anything like Asia, then it's probably unfair to US automakers. In South Korea if you see someone driving a GMC Yukon, you know that person is either pretty well off or lives in a shack because they spent all their money on a US imported car. Taxes over there on imports are outrageous. I say if the country is going to tariff/tax US companies 80-100% of the price of the vehicle, we should do the same on their imports.
That Korean tariff is going to zero with the new free trade agreement.
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Old 05-24-2013, 05:35 PM   #10
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Originally Posted by CubeShin View Post
The article also doesn't mention the tariffs/taxes imposed on US vehicles imported into the different European countries. If it's anything like Asia, then it's probably unfair to US automakers. In South Korea if you see someone driving a GMC Yukon, you know that person is either pretty well off or lives in a shack because they spent all their money on a US imported car. Taxes over there on imports are outrageous. I say if the country is going to tariff/tax US companies 80-100% of the price of the vehicle, we should do the same on their imports.
wow, didnt know s.korea tax our cars that much. At 2.5%, thats nothing to complain about. I agree, we should do the same to them also.
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Old 05-24-2013, 06:06 PM   #11
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Originally Posted by CubeShin View Post
The article also doesn't mention the tariffs/taxes imposed on US vehicles imported into the different European countries. If it's anything like Asia, then it's probably unfair to US automakers. In South Korea if you see someone driving a GMC Yukon, you know that person is either pretty well off or lives in a shack because they spent all their money on a US imported car. Taxes over there on imports are outrageous. I say if the country is going to tariff/tax US companies 80-100% of the price of the vehicle, we should do the same on their imports.
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wow, didnt know s.korea tax our cars that much. At 2.5%, thats nothing to complain about. I agree, we should do the same to them also.
No, CubeShin is talking out of his ass and spreading misinformation. The South Korean tariff on US cars was 8%, but now it is 4% and will go to zero in a few years per the FTA agreement.

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The KORUS agreement keeps the 2.5% U.S. tariff in place until the fifth
year after implementation of the agreement. At the same time, Korea will immediately cut its tariff on U.S.
auto imports in half (from 8% to 4%), and fully eliminate that tariff in the fifth year.
80~100%? That is so ridiculous I don't even know what to say. Yes, the tax on cars in general are higher in many countries in the world. But that is very different from the tax specific to imported cars.
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Old 05-25-2013, 07:47 AM   #12
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Wow that is a crappy deal then Len.

If they have an 8% tariff then why is ours 2.5%? We should have set the agreement so ours goes to 8% and stays there until they drop to 4%. Then ours should go to 5.5% to make up for the years they shafted us. Once they have paid back the difference in years of tariff then we should drop to zero.
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Old 05-25-2013, 11:27 AM   #13
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Seems they forgot the real reason for many US spec cars was really trade barrier. By making EPA stringent regs this kept many imports out. Unseen was that many Japanese brands had better luck meeting them than domestics. It did push many European brands out of US market,
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Old 05-25-2013, 12:21 PM   #14
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Wow that is a crappy deal then Len.

If they have an 8% tariff then why is ours 2.5%? We should have set the agreement so ours goes to 8% and stays there until they drop to 4%. Then ours should go to 5.5% to make up for the years they shafted us. Once they have paid back the difference in years of tariff then we should drop to zero.
Well, then that's not a trade agreement, but a trade war.

The trade barrier between the two couuntries were clearly asymmetrical, likely because the US had a strategic interest during the cold war to help S. Korean economy develop. On the other hand, at that time the US probably did not expect that Korean firms would grow to be major competitors to the US. S. Korea is, after all, a fairly small country and used to be extremely poor.

But given the enormous influence the US has over S. Korea, I wouldn't worry too much about the US getting shafted. If you see something that you think is unfair between the two countries, the reason would certainly not be because the Koreans are forcing it on the US, but because the US government has a different idea about what serves its interest than you.
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Old 05-25-2013, 02:30 PM   #15
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That sounds nice and reasonable, except you really have no evidence for that. Politicians here are elected. The electorate is happy if they can buy goods cheap. That is an incentive not to put tariffs on imports from other countries regardless of what is happening with our goods because that would diminish the supply of cheap goods for the electorate to buy. It is silly to discount everything that appears unfair as something that serves our interests. That suggests we have absolute power over all things in the world which is frankly ridiculous.
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Old 05-25-2013, 03:40 PM   #16
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That sounds nice and reasonable, except you really have no evidence for that. Politicians here are elected. The electorate is happy if they can buy goods cheap. That is an incentive not to put tariffs on imports from other countries regardless of what is happening with our goods because that would diminish the supply of cheap goods for the electorate to buy. It is silly to discount everything that appears unfair as something that serves our interests. That suggests we have absolute power over all things in the world which is frankly ridiculous.
I did not say that we have absolute power over all things. What I said was that it's unlikely the US was forced into an unfair trade relations with S. Korea, given the asymmetry in power between the two nations. Of course if we are talking about a different country, say, China, then the story could be different, although even there I think Americans tend to overestimate the power China has over the US.

Naturally there will be some level of padering and short-sightness in any society, but there are genuine disagreements in what it is that serves our interest as well. I don't know what your position is on trade exactly, but just based on the two posts you sound like you might prefer a more protentionist policy. Let's say you do, for the sake of the argument. Obviously that is a fairly popular position held by many. On the other hand, I don't know of any serious economist who believe that trade barriers are good for the economy in the long run. This is one of the rare topics that unite the left and right wing economists, their belief in free trade. Now I am NOT saying therefore protectionism is wrong, but I am saying that many people believe free trade is good not because they have to get elected, or for some other sinister reasons, but because it what they sincerely believe.

Speaking of free trade, in fact partially because of the open trade policy of the US, we do have more products available at lower price than just about anywhere else in the world. When people visit America, whether they are coming from a first world country or a thrid world country, they all go bonkers shopping. We can debate the value of such material abundance, but it is certainly something that appeals to a lot of people, including potential immigrants.
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Old 05-25-2013, 04:14 PM   #17
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In South Korea if you see someone driving a GMC Yukon, you know that person is either pretty well off or lives in a shack because they spent all their money on a US imported car.
Yeah my guess is, the tariff could be a negative 8% and you still wouldn't see any more GMC Yukons on the streets of South Korea.
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Old 05-25-2013, 05:39 PM   #18
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Len the question is whether it is advantageous to have lower barriers to incoming products in your country while your exports face higher barriers. The question isn't whether free trade is beneficial. And actually even there you are incorrect you can find serious economists who will disagree and support tariffs of the kind you saw in Brazil, India, or S.K. as their economies were developing. The argument being they help develop local expertise.
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Old 05-25-2013, 07:27 PM   #19
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Len the question is whether it is advantageous to have lower barriers to incoming products in your country while your exports face higher barriers. The question isn't whether free trade is beneficial. And actually even there you are incorrect you can find serious economists who will disagree and support tariffs of the kind you saw in Brazil, India, or S.K. as their economies were developing. The argument being they help develop local expertise.
I agree having asymmetrical tarif does not make any economic sense. In Korea's case, it wasn't economically motivated, but geo-politically. But now that there is little reason for the US to support the development of Korean economy at the expense of American companies, both because the cold war is over and because Korea is no longer in poverty, they are getting rid of it.

You are right that some economists see value in protectionism, but AFAIK only in limited cases for developing countries. I might add that this idea became fashionable after the success of Asian countries that employed this strategy. And no doubt it was made possible because the US and the test of the west "let it slip" for non-economical reasons. But I don't think there are many economists that argue for protectionism in developed countries. I could be wrong though.
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Old 05-25-2013, 09:26 PM   #20
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You are right, but I was using Brazil and India as examples of developing countries. Originally the traditional economic thought was that protectionism was bad anyway b/c it did not allow the most efficient allocation of capital and labor, but that school of thought was proven wrong as you said with the success of countries that did it. Tata motors would not exist if they had not been protectionist.

The reason I say that thought is economists don't know all the answers even if they think they do (hopefully you are not an economist, or if so not one that thinks they know all the answers ).
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Old 05-25-2013, 09:54 PM   #21
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You are right, but I was using Brazil and India as examples of developing countries. Originally the traditional economic thought was that protectionism was bad anyway b/c it did not allow the most efficient allocation of capital and labor, but that school of thought was proven wrong as you said with the success of countries that did it. Tata motors would not exist if they had not been protectionist.

The reason I say that thought is economists don't know all the answers even if they think they do (hopefully you are not an economist, or if so not one that thinks they know all the answers ).
I'm not an economist, so no worries there. :-) I agree they don't have all the answers , if they did they should have been able to predict the success of some if these developing countries. Instead they were mostly following the data.
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