It’s been a long time since international trade dominated any debate where Detroit automakers are concerned. But this week we’ll hear a lot about the biggest trade deal since NAFTA when President Obama and South Korea President Lee Myung-bak visit Michigan. Hit the jump to read the rest of the story.
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The two leaders will tour GM’s small-car assembly plant near Detroit and tout expanded auto trade between the two countries under a sweeping new pact.
Congress approved the deal — negotiated by President George W. Bush in 2007 and revised under Obama at the urging of Ford Motor Co. and the UAW — on Wednesday.
If Americans can drive Kias and Hyundais in record numbers, Obama insists that South Koreans ought to be driving more Jeeps, Buicks and Fords.
Under the pact, the United States will keep a 2.5 percent tariff on Korea-built cars until the fifth year. In return, Korea will cut its tariff on U.S. auto imports from 8 percent to 4 percent and eliminate the tariff in the fifth year.
South Korea also will immediately reduce its tariffs on electric cars from 8 percent to 4 percent, and both countries will phase out EV tariffs by the fifth year.
The U.S. International Trade Commission said in April that it expected the deal to boost South Korean exports to the United States far more than any increase in U.S. exports there.
