European Commission

European Commission Rejects French Call to Monitor South Korean Auto Imports

French Minister for Industrial Renewal, Arnaud Montebourg, has claimed several times that South Korean manufacturers were dumping their cars on the European market to garner market share.

The European Commission rejected on Monday a French request for close oversight of auto imports from South Korea, saying there was no legal basis for such a move.

"The French request for the introduction of prior surveillance concerning cars from Korea has been refused because the legal conditions were not met," a spokesman for EU Trade Commissioner Karel De Gucht said.

"Even if imports into the EU of cars from Korea indeed increased over the last months, there was no indication that such an increase was concentrated in France," spokesman John Clancy added.

French Minister for Industrial Renewal, Arnaud Montebourg, has claimed several times that South Korean manufacturers were dumping their cars on the European market, a practice of selling goods for less than they cost, to garner market share.

In August, France formally asked the European Union to begin monitoring car imports from South Korea in the first step toward a possible re-introduction of tariffs, in a request made under the terms of an EU-South Korea free trade agreement signed in 2010.

The FTA took effect on July 1, 2011, and French officials have said there was a 50% increase in South Korean auto imports in January and February this year.

On Thursday, South Korean Trade Minister Taeho Bark said in an online interview with the French daily Les Echos that he understood Montbour's concerns, but not his arguments.

Bark Denies Dumping Cars

Bark denied the dumping accusations, insisting South Korea offered no subsidies at all to the auto-manufacturing sector.

Clancy said Monday that "while it is true that the car sector in the EU, and in particular in France, is going through a difficult period, this cannot be attributed to the entry into force of the EU-Korea FTA.

"In general, trade figures more than one year after the entry into force of the agreement are rather encouraging and indicate that the EU mostly benefited from this FTA so far," the commission spokesman added.

He said, "It is worth noting that despite the increase in car imports from Korea since the entry into force of the FTA, the level of EU car imports from Korea remains 37% below the level before the financial crisis and thus looks like a recovery effect."

South Korean Automakers Make Inroads

South Korea's two biggest automakers have made significant inroads into the European market, with Hyundai (IW 1000/54) sales up 12% last year and Kia (IW 1000/103) deliveries up 11%.

France's auto industry is struggling in comparison. In July, the country's biggest manufacturer, Peugeot (IW 1000/47), unveiled first-half losses of 819 million euros ($1.1 billion) and is in the process of axing thousands of jobs.

Copyright Agence France-Presse, 2012

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