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Auto Parts Advisory Group Issues Recommendations to U.S. Government

27 June 2000

Auto Parts Advisory Group Issues Recommendations to U.S. Government

    WASHINGTON, June 27 The U.S. Auto Parts Advisory Committee
(APAC), a federal government advisory group, has issued recommendations to the
U.S. Department of Commerce, Office of the U.S. Trade Representative, and
Congress calling for continuation of a U.S.-Japan trade agreement through
2005.  The current accord -- the U.S.-Japan Automotive Framework Agreement --
expires on Sunday, Dec. 31, 2000.
    APAC believes that the central objectives of the 1995 agreement have not
been achieved: significant expansion of U.S. industry's sales opportunities
and market access that result in increased purchases of U.S. auto parts in
Japan and in the United States and other world markets by Japanese vehicle
manufacturers.  U.S. parts exports to Japan declined in 1998-1999, and
Japanese government deregulation actions stalled after initial progress.  The
U.S. auto parts trade deficit with Japan rose in both years, reaching $10.9
billion in 1999, after declining in the early years of the Framework
Agreement.  APAC projects this deficit could reach $13 billion this year.
    Committee members, including associations representing a broad cross-
section of U.S. manufacturers of original equipment, aftermarket, and
specialty automotive products, note that earlier momentum toward expanding
U.S. exports and global sales to Japanese vehicle builders has been lost.  The
recommendations thus include proposals that the United States and Japan
enhance the terms of the present agreement in a new agreement that would
remain in effect from 2001 through 2005.
    The APAC recommendations cover proposals for expanding trade and opening
Japan's original equipment, original equipment service, and independent
aftermarket parts and accessories markets to U.S. automotive product
suppliers.  Among the recommendations are proposals for the Japanese
automakers to issue new foreign parts purchasing plans, continuation of
current parts purchasing reports through the Japan Automobile Manufacturers
Association (JAMA), further deregulation of the aftermarket in Japan, and
opening of Japan's market to foreign investment.  The recommendations cover
market opening measures for Japan's domestic market, as well as more open
purchasing by Japanese vehicle producers' overseas subsidiaries and affiliates
in North America, Europe, and emerging automotive markets throughout the
world.
    APAC members emphasize that they do not seek local content requirements,
export targets, or any other form of managed trade with Japan.  Rather, the
Committee believes that a new agreement should include appropriate
quantitative and qualitative indicators of business expansion that both
governments and industries can refer to as they assess future progress.  With
the dramatic changes occurring in the global automotive industry, a new U.S.-
Japan agreement based on the APAC's recommendations will help ensure that
American parts manufacturers and their employees have full, free, and fair
market access in Japan and in other world markets where Japanese automotive
companies have a major presence.
    A summary of the APAC recommendations may be obtained at the association
Web sites: AAIA, http://www.aftermarket.org ; MEMA and OESA, http://www.mema.org ; and SEMA,
http://www.sema.org .