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(LEAD) S. Korea voices opposition to U.S. auto tariff

All Headlines 11:20 July 20, 2018

(ATTN: RECASTS throughout with more comments, background; CHANGES headline)

WASHINGTON, July 19 (Yonhap) -- The South Korean government and auto industry on Thursday voiced opposition to the United States' proposed tariffs on imported cars, saying Korean cars do not pose a threat to U.S. security and such measures could undermine the benefits of the recently revised bilateral trade deal.

Four representatives from the Korean side presented their case against the 25 percent tariff being pushed under President Donald Trump on national security grounds during a public hearing at the U.S. Department of Commerce.

Kang Sung-cheon, South Korea's deputy trade minister, argued that Korean autos and auto parts should be exempted from any tariffs as Seoul agreed to "greatly enhance market access" to the Korean market for American cars in the recently revised free trade agreement. It has yet to be formally signed.

"Our two countries have just reached an agreement-in-principle on the KORUS FTA amendment negotiations this March, which was focused primarily on autos. As such, we believe that Korea does not undermine or diminish in any way the national security of the United States," Kang said. "Any measure under Section 232 has the potential to fundamentally undermine the benefits of KORUS for both countries."

KORUS FTA is the acronym for the South Korea-United States Free Trade Agreement.

This photo shows a public hearing on proposed U.S. auto tariffs at the U.S. Department of Commerce in Washington on July 19, 2018. (Yonhap)

Kang also said Korean automakers contribute to the U.S. economy by investing over $10 billion and supporting more than 110,000 quality jobs for American workers.

"Korean automakers ... produce core components in the U.S., and carry out numerous R&D projects on cutting-edge technologies across the United States," Kang said.

Industry officials claimed that Korean car companies, mostly exports small and medium-sized cars, are not direct competition with big three American automakers that focus more on SUVs, pickup trucks and large sedans, highlighting the benefit of the bilateral trade pact on both countries' auto industry.

"Korea's imports of U.S. automobiles from three major U.S. automakers tripled for the last six years from 2011 to 2017," Kim Yong-geun, the president of the Korea Automotive Manufacturers Association, said. "Moreover, I'm confident that the sales of U.S. automobiles in Korea will continue to increase in years to come due to their competitiveness in the large car segment."

South Korea's auto exports to the U.S. jumped 80 percent from 2011 to US$18.49 billion in 2015, while its imports of American-made cars soared 380 percent from 2011 to $1.68 billion in 2015, according to government data.

John Hall, who works for South Korean automaker Hyundai Motor at its manufacturing plant in Montgomery, Alabama, pointed out that the White House had acknowledged the improvements the new terms of the Korea-U.S. free trade agreement bring to the American auto industry and national security.

"Some may view Hyundai as a foreign automaker, but I know from experience that we are an integral part of the American automotive industry," Hall said. "Approximately half of the vehicles we sell in the United States are made in Alabama. We export about 20 percent of the vehicles we make, and our exports have increased over the past five years, helping Alabama become the third largest auto-exporting state."

He said these operations directly support thousands of American jobs and indirectly support thousands more across the country.

Out of 2.53 million Korean vehicles sold abroad last year, about 33 percent were shipped to the North American country, according to data compiled by the Korea Automobile Manufacturers Association.


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