Quotas on Japanese auto exports to the United States cost the American consumer $15.7 billion over the past four years while saving 44,000 auto workers' jobs, a U.S. International Trade Commission report said yesterday.
Without the so-called "voluntary restraint agreement" (VRA), however, Japanese auto makers would have sold 1 million more cars in this country and the United States' trade deficit with Japan, a record $36.8 billion last year, would have been almost $4 billion higher.
The report by the quasi-judicial commission was prepared at the request of the House Ways and Means Committee and drew no conclusions as to whether the Reagan administration should request that Japan continue the quotas for a fifth year when they expire March 31. Japanese auto exports to the United States are limited to 1.85 million cars a year.
A Cabinet-level committee is considering the question of extending the quotas, which is being heavily debated in U.S. and Japanese auto and trade circles. While the restraints have little support among Cabinet members, especially with the record profits American auto makers have racked up over the past two years, key administration officials are concerned that a sudden increase in imports of Japanese cars will snuff out the industry's economic recovery.
The ITC report provides ammunition for both sides of the issue. Gerald Greenwald, Chrysler Corp. executive vice president for finance, for instance, said yesterday that "I don't believe the ITC report" on the cost to American consumers of the voluntary restraints.
He blamed the sharp increases in the cost of Japanese imports on the dealers, who he said took advantage of the shortages created by quotas to raise their prices -- a point also underscored in the ITC report.
The ITC estimated that prices charged for Japanese autos last year were $1,300 a car greater than they would have been if there had been no quota. The extra costs have increased each year, the study showed, starting with a $185-a-car premium in 1981, the quota's first year. Retail prices of Japanese cars increased by an average of 33 percent during the four years the VRAs have been in force as the manufacturers shipped more expensive cars to the United States and dealers added options to gain extra markups.
"By restricting the supply of imported autos while demand was growing, the VRA appears to have resulted in higher prices each year for U.S. consumers of Japanese cars," the ITC report said.
American car makers also were able to charge $660 more for each of their cars last year because of the VRA, the ITC economists reported, while the value of used cars was inflated by the quotas. "Many buyers turned to the used car market because of reduced availability and higher prices of new Japanese autos."
While the Japanese auto makers made more money and American consumers paid higher prices because of the quotas, the ITC investigators said the VRA achieved its objective of curtailing Japan's share of the U.S. car market. Without the quotas, the ITC estimated, Japanese cars would have captured 28 percent of U.S. car sales instead of the 18.4 percent they recorded last year.
The VRA also was responsible for adding 44,000 jobs in the auto industry, and the ITC report said that total could be higher if jobs in industries that supply the car makers are counted. These added jobs could be offset, however, by the VRA's effect in strengthening the American dollar, which could have hurt other industries that compete with imports.
The report found that Japanese autos have a cost advantage of between $1,000 and $1,500 a car because of that nation's lower wages, higher productivity, better management and the strong dollar.
U.S. car makers are split over whether the quotas should be continued. The United Auto Workers, Chrysler, Ford and American Motors favor keeping them on. General Motors, which already has arrangements to import brands of Japanese-made small cars, wants the quotas dropped.