Pro-trade Democrats line up with critics of Japan’s cash-for-clunkers program

In a letter to Japan’s ambassador to the U.S., 40 members of the New Democrat Coalition call on Japan to allow imported vehicles to be sold under the program.
The lawmakers criticize the rules as a barrier that is part “of an unfortunate historical pattern of the Japanese government keeping its domestic auto industry closed to foreign competition.”

The letter is significant because most of the complaints about Japan’s program so far have come from Rust Belt lawmakers. The criticism from the New Democrats suggests widespread ire in Congress, running across regional and philosophical lines, against Japan’s program.
Japanese companies were among the greatest beneficiaries of the U.S. cash-for-clunkers program. Nearly half of the 677,000 vehicles sold under the U.S. program were made by Japanese companies.
According to Department of Transportation data, 120,507 Toyotas were sold under the program, more than any single U.S. automaker. Honda sold 87,584 vehicles and Nissan 58,700 vehicles under the U.S. program, in which consumers won government subsidies for trading in older gas-guzzlers for more fuel-efficient vehicles.
The program was intended to spark sales of U.S. vehicles in a terrible auto market and get gas-guzzlers off the roads.
Japanese officials have pointed out that U.S. workers built many of these vehicles. About 80 percent of Japanese-brand autos sold in the U.S. are built in the U.S.
Under Japan’s program, consumers who trade in a car at least 13 years old can get a tax cut of up to $2,800 toward the purchase of a new car. But cars made by Ford, General Motors and Chrysler have been deemed ineligible because they are imported under a regulatory protocol that does not require that they be inspected for fuel efficiency.
Rep. Sandy Levin (D-Mich.) on Friday announced he’d hold hearings next week on barriers to U.S. auto sales in Japan and South Korea. Levin singled out the Japanese cash-for-clunkers program in a statement.
“Japan’s exclusion of U.S. autos from its Cash for Clunkers program highlights the one-way trade policies these countries pursue to the serious detriment of the United States,” said Levin, chairman of the House Ways and Means Committee’s Trade subcommittee. That panel will hold a hearing on the issue Thursday. 

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