Washington, DC - Congressman John Dingell (D-MI-15) sent a letter this week to President Obama asking that he urge the government of Japan to change its auto purchase incentive, or “cash-for-clunkers,” program to allow free and full participation by foreign automakers. 

While the U.S. Car Allowance Rebate System (CARS) fully complied with international trade obligations and permitted any automaker, regardless of nationality, to participate in the program, a similar program in Japan excludes virtually all foreign vehicles and all U.S.-produced vehicles.  According to a January 14, 2010, report by the Center for Automotive Research, had the CARS been restricted to vehicles manufactured in the North American Free Trade Area, it would have created or saved 15,900 more jobs in the United States.  The National Highway Traffic Safety Administration (NHTSA) estimates CARS, as it was designed and implemented, created or saved at least 60,000 jobs in the United States.

“While the U.S. cash-for-clunkers program provided unfettered access to the U.S. market for foreign automakers, many of which benefitted handsomely from the program, U.S. automakers are effectively prohibited from participating in the analogous Japanese program,” said Dingell.  “This is patently unfair and constitutes, in my view, a clear violation of Japan’s obligation as a member of the World Trade Organization to afford national treatment to products from other member countries.  Moreover, in light of the U.S. decision to forego additional job creation in order to comply with international trade mandates, it is unconscionable that Japan maintain such a restrictive fleet modernization program.”

Congressman Dingell’s letter asks President Obama to initiate a case against Japan at the World Trade Organization, should Japan not open its cash-for-clunkers program to foreign participation.  A copy of the letter is attached.

 

 

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