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April 12, 2005

BELGIUM: EU and car industry pledge technology and quality rather than protectionism

The European Union and its car industry on Monday reportedly vowed not to impose protective measures to shield the embattled sector from foreign competition and said it would hold on to the high wage structure even though it hurts its competitiveness.

The European Union and its car industry on Monday reportedly vowed not to impose protective measures to shield the embattled sector from foreign competition and said it would hold on to the high wage structure even though it hurts its competitiveness.

According to the Associated Press (AP), EU industry commissioner Guenter Verheugen said the European car industry will instead focus its efforts on producing high-quality cars offering the latest in technology and environmental protection, to safeguard a healthy future.

The EU industry chief reportedly said after the first meeting of the CARS21 working group of car companies and unions that a full strategy to kick-start the industry would be available at the end of the year.

“There was full agreement that the European automotive industry cannot compete on the basis of lower wages, lower quality and lower standards,” Verheugen told AP after the meeting.

And despite higher wage costs than in Asia, all producers reportedly agreed that no special measures should be taken to keep cheaper cars out of the 25-nation EU.

“Nobody even raised the question whether it should be possible and preferable to protect the European automotive industry against competition from other parts of the world,” Verhuegen told the Associated Press.

AP noted that Monday’s meeting was given special urgency after Britain’s last major car manufacturer – MG Rover Group – filed for a form a bankruptcy last week.

Verheugen reportedly also promised that the group would institute a competitiveness and bureaucracy test on all EU legislation and regulation to make sure car companies are not unduly hurt in the global market by the introduction of new rules.

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