Punitive duties sought on import cars Detroit's Big 3 plan record case

January 26, 1993|By New York Times News Service

WASHINGTON -- In a clear test of the Clinton administration's attitude on trade policies, Detroit's Big Three automakers have told federal trade officials that they intend to seek punitive duties on all imported cars, four people involved in the cases said yesterday.

The automakers -- using a more combative approach than they have taken in recent months -- will charge that Japanese and European automakers are violating federal law by selling cars for less in the United States than they charge for the same cars in their home markets, said a federal official, who insisted on anonymity.

The automakers hope to file their complaints at the Commerce Department within two or three weeks, the official said.

In effect, they are asking the Clinton administration to impose taxes that could add thousands of dollars to the sticker prices of imported cars. The case will easily be the biggest of its kind ever filed in the United States, covering as it will almost all of the nation's annual $45 billion worth of passenger-vehicle imports.

John E. Guiniven, a spokesman for Chrysler Corp., said the company was "always looking at" the possibility of taking action under American trade laws, but he said no decision had been made. Spokesmen for General Motors Corp. and Ford Motor Co. made similar comments.

But people involved in the case said the decision to proceed had been made and that thousands of pages of legal evidence had already been prepared.

The cases show a basic change of heart about trade policy in the auto industry, which is led by new executives and faces huge financial losses and a new and more receptive administration.

The Detroit automakers have long fought foreign trade barriers but have been divided for three decades over how much they want the government to limit access to the U.S. auto market.

Chrysler and Ford have been more enthusiastic about import limits. But General Motors has been opposed, fearing that U.S. trade barriers might result in foreign retaliation that would restrict the company's extensive export sales.

A Washington trade lawyer who insisted on anonymity said the change in Detroit tactics reflected, in part, the recent replacement of many senior executives at GM with executives who are much less enamored of free trade ideals.

GM's new chief executive, John F. Smith Jr., used to run GM Europe, which has profited for years from the European Community's severe restrictions on automobile imports from Japan.

But the installation of a Democratic administration in Washington has also encouraged Detroit automakers and many other domestic industries that have been struggling to compete with imports and have refrained from filing trade cases at the Commerce Department during the Bush and Reagan administrations because they were doubtful they could win.

A final ruling on duties takes nearly a year, and the legal expenses for each side can run into the tens of millions of dollars. The appeals can drag on for many years after that, but duties are collected during these years if the ruling was in favor of the domestic industry.

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