Car lobby threat over Japan’s emission rules

Date: 17/12/1998

By Peter Chapman

European car firms are warning they will call for World Trade Organisation action against Japan if it goes ahead with plans to target their exports for tougher than average carbon dioxide emission rules.

The warning from Camille Blum, secretary-general of European car lobby ACEA, comes as Tokyo considers new CO2 emission limits to meet commitments it made at the climate change conferences in Kyoto last year and Buenos Aires last month to cut its greenhouse gas emissions.

European fears over Japan's new regime follow Japanese and Korean firms' attempts to thrash out a voluntary deal with the European Commission to match ACEA members' far-reaching promise of a 25% cut in airborne pollution in Europe by 2002.

"The Japanese are coming to their own restrictions on emissions. There would be regulation which would force the industry to reduce consumption by classes of vehicles according to weight," said Blum.

He claimed that mid-to-luxury range cars which Europe specialises in would be hit hardest, while many other models mostly produced in Japan and with higher fuel consumption would get off lightly.

"If you look at the figures, the type of vehicle we are selling to Japan would be discriminated against. The regulations would mean 88.5% of vehicles would have to comply with tougher reductions. These are not necessarily the ones which consume most," he said.

Blum claims that ACEA has already won the sympathy of Commission officials following consultations over the issue. All eyes are now on Japan's Ministry of International Trade and Industry (MITI), which will be responsible for deciding whether to implement the draft emission rules tabled by the Ministry of Transport. The MITI is expected to rule shortly on the regime. If it supports the restrictions, ACEA will hold further talks with the Commission about the possibility of WTO action.

"How does the industry fight back? We will discuss with the Commission to see if it is something for the WTO to open a panel on," said Blum.

ACEA fears the Japanese regime could have the same effect on its members as old restrictions imposed by the US on car makers, which led to market distortions to the detriment of European manufacturers.

Blum said the American rules targeted the 'sedan' cars in which Europe specialised, forcing the market to develop towards increased production of four-wheel-drive cars which were not hit by restrictions - an area in which Europe was much less strong. "That is why we are being careful this time," he added.

Europe's own agreement, which covers US manufacturers such as Ford and GM with bases in Europe, anticipates technical advances yet to be made which will make the promised reductions possible.

Ford Europe president Jim Donaldson acknowledges the massive challenge facing car firms, but insists that the industry will do all it can to meet it. "It is unusual for an industry to voluntarily undertake to do something when at the date of agreement we do not know how to do it. It is theoretical," he said. "But it was the same in the Sixties when Kennedy said we should go to the moon. There was nobody there with the rocket ready. We now have to gain credibility by telling the world what our progress is and by demonstrating that we are trying to make it happen."

Both the Japanese and Korean car industries are under pressure to sign up to similar commitments to those made by Europe-based manufacturers, which fended off the threat of mandatory targets with their offer of a voluntary deal earlier this year.

Japanese officials were this week meeting Commission officials to discuss the issue. Institution sources said these talks were at "very early stages", adding that it was unlikely that a deal would be clinched ahead of next Monday's (21 December) meeting of EU environment ministers.