European Auto Sector Threatened by WTO Deal

Says it could be forced to move production abroad

The European automobile industry voiced deep concern on July 29 about WTO trade talks, warning it could be forced to move production abroad if Europe made concessions on manufacturing goods that were too generous.

WTO ministers are struggling to clinch a global trade liberalization deal in make-or-break talks in Geneva, aimed at reviving the long foundering Doha round of negotiations, launched seven years ago. "The currently discussed unfair and imbalanced trade deal would leave the EU industry no other choice than to revise its future investments ... to locations outside EU," said Ivan Hodac, head of the ACEA trade association.

"Also, additional investments will have to be made in major emerging economies, as their markets will remain closed to imports through the use of flexibilities and the maintaining of peak tariffs," he added. "The EU would clearly lose out as a location for manufacturing."

In a joint statement with the European Metalworkers' Federation, ACEA said that draft agreement gave Europe too little access to major emerging economies for what it was having to offer. "The result could be major job losses in the EU, at the level of the manufacturers, but also in the supply chain," said EMF head Peter Scherrer.

The statement said the European automobile industry employed 2.2 million people directly and was the biggest private spender on research and development in the EU, shelling out 20 billion euros (US$31 billion) annually.

Copyright Agence France-Presse, 2008

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