Absence of U.S. cars from Japanese 'clunker' program irks lawmaker

Rep. Betty Sutton (D-Ohio) said U.S. cars are excluded from the Japanese program, calling that
Rep. Betty Sutton (D-Ohio) said U.S. cars are excluded from the Japanese program, calling that "outrageous." (Bill O'leary/the Washington Post)
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By Peter Whoriskey
Washington Post Staff Writer
Thursday, January 7, 2010

When U.S. Rep. Betty Sutton (D-Ohio) proposed the "Cash for Clunkers" program to bolster the U.S. auto industry last year, she limited the government purchase incentives to cars produced in North America.

But the exclusion soon aroused complaints from overseas automakers and free-trade advocates, and she relented. The $3 billion U.S. program ran over the summer and was open to all fuel-efficient cars, no matter where they were made.

Now the trouble is, as Sutton sees it, that the Japanese government has not returned the favor. Under that country's own incentive program, not a single car from the Detroit Three is eligible.

"It's outrageous," Sutton said Wednesday. "They specifically designed it to exclude the participation of U.S. auto imports."

In recent weeks, the Japanese clunkers program, which may soon be extended, has become the focus of growing complaints from U.S. automakers and other interests.

As far back as October, the U.S. trade representative urged Japan to amend the program.

This week, the U.S. Chamber of Commerce has issued a letter expressing concern.

And on Tuesday, Sutton filed a resolution calling for the U.S. trade officials to initiate a trade case against Japan if its program continues to exclude U.S. brands.

But the rules for the Japanese incentive program are complex, and Japanese officials argue that it is open to imports but that American automakers have opted not to apply.

"We think our program is fair and nondiscriminatory," said Satoshi Miura, an official at the Japanese Embassy in Washington.

U.S. automakers typically bring cars into Japan under a program known as "Preferred Handling Procedure," which is cheaper than other importation methods but makes those cars ineligible under the Japanese incentive program, Miura said.

But Korean and European automakers have taken the necessary steps to become eligible.

"Currently no American cars qualify," he said. "They do not get the type approval."

Nearly half of the U.S. government's $3 billion clunkers program went toward buying Japanese cars and trucks, accounting for about 319,000 out of a total of 677,000 vehicles sold under the program. But according to Miura, about 80 percent of the Japanese branded cars in the program were vehicles built in North America.

The biggest winner in the United States was Toyota.

"Toyota has no objection to inclusion of any foreign auto manufacturer in the Japanese program," said Ed Lewis, a Toyota spokesman. "We understand the U.S. government and the government of Japan are working on this issue and trust that they will work cooperatively toward a solution."

No figures for how many imported cars have been sold under the Japanese incentive program were immediately available.

A spokeswoman for the U.S. trade representative said that the office "continues to raise this issue with the Japanese government, including at a senior level." The spokeswoman, Nefeterius A. McPherson, added that "in light of serious U.S. concerns, both sides have agreed to continue to consult. We hope to find a way forward through these discussions."

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