France has launched a vigorous protest to the European Commission (EC) concerning what it believes to be a massive increase in passenger vehicle imports from South Korea.
The European Union and South Korea inked a Free Trade Agreement (FTA) last July, but a sudden huge spike in Korean car imports has seen the French government ask Brussels to scrutinise the situation closely.
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“During January and February, 2012, the average increase was 50% compared to the same period the previous year,” said a statement from Economic Redevelopment Minister, Arnaud Montebourg. “The small cylinder, diesel segment is particularly affected, with very large increases.
“The Agreement allows for any sudden rise in imports to one or several member States, of products belonging to a sensitive sector, such as cars, must be notified to the Commission, which will look at it as quickly as possible.”
The French government adds its request to the EC should lead to a more precise understanding of the scale of such “bilateral imbalances,” with importers having to obtain permission from Brussels to import, although how this sits with the free trade aspect of the Agreement is unclear.
“This new data will allow an understanding of the real effect of free trade between the EU and Korea in the automobile sector and to envisage new action to take if commercial relations turn out to be unequal,” added Montebourg.
The French automakers association – Comite des Constructeurs Francais de l’automobile or CCFA – was not immediately available for comment from Paris.
The European equivalent of CCFA – ACEA – based in Brussels – said between 1 July last year when the FTA became operational and 31 May – Korea exported 400,000 domestically-manufactured passenger cars into the EU, a 40% increase from the same period one year earlier.
But Korea imported just 73,000 European passenger cars, which represents an increase of 13%.
ACEA said that this was “a very different picture to that presented by the European Commission.”
The EC had claimed European car exports to Korea increased by 70%, worth EUR670m (US$828m) in new car sales.
