A Carter administration official told reporters yesterday that price-tax rebates on fuel-efficient cars, under its proposed energy program, might not apply equally to imports.
C. Fred Bergsten, Treasury assistant secretary for international affairs, said the rebates on small imports such as Volkswagens, Toyotas and similar cars might be limited to reflect the number imported in some base year.
In effect, this would give foreign manufacturers less rebate money to spread among their cars; it would reduce rebates on importee cars compared to Detroit products getting the same mileage.
He conceded that this could work out to the disadvantage of countries and companies which have been enjoying large sales here, but said "if there were an unrestrained import rebate" it would reduce the possibility of having a "viable domestic auto industry."
Bergsten admitted that this might be challenged as a violation of the international trading rules known as GATT (General Agreement on Tariffs and Trade), but said he believed acceptable language could be worked out.
In his address to Congress Wednesday night, President Carter said he would work with U.S. trading partners on this issue to make sure they are treated "fairly."
William Kelly, acting special trade representative for the President, said in a telephone interview that "no decision" has yet been made on how to handle this problem, and that legislation to be introduced next week would not mention a base year for imports.
But he said that while the intention of the auto tax-rebate scheme was to maintain a "trade neutral" posture, it was clear that applying the same rules to imports would have the effect of "displacing" some U.S. production and jobs, because "90 per cent of the imports would get rebates, as against only half of the U.S. domestic production."
Bergsten made his comments at a press briefing on a speech scheduled for delivery in Chicago yesterday, outlining the administration's international economic policy. A text was released here by the Treasury.
The Carter tax-and-rebate proposal is designed to ensure compliance with an existing federal law requiring cars to average at least 18 miles per gallon in the 1978 model year, 20 in 1980, and 27.5 in 1985.
Cars that don't meet a given year's mileage cut-off would be taxed, and that money would be rebated to those buying cars that do better than the cut-off point. The greater the miles-per-gallon performance, the greater the dollar rebate.
Originally, Bergsten said, administration officials had planned no rebates on imported cars, "but cooler heads prevailed." By limiting the rebates to imports in some base year, the domestic industry would be given a competitive edge.
Bergsten said, however, that the over-all Carter energy program had been adopted "with the needs of the international economy in mind."
He pointed out that a reduction in U.S. energy use "will have an effect on the [world energy] price structure." As heavy users of energy, he noted, West Germany and Japan - the main exporters of cars to the United States - would thus benefit from the Carter program.
Bergsten, who recently returned from discussions of international economic issues with European leaders, indicated that no final decisions are likely at next week's Washington meeting of the International Monetary Fund's policy-making Interim Committee on boosting the IMF's lending potential.
IMF Managing Director H. J. Witteveen has been seeking contributions from the oil cartel and from industrial nations, amounting to about $16 billion, for lending to borrowing countries on strict terms. "The uncertainty," Bergsten said, "is how much Saudi Arabia will [agree to] come in with." The Witteveen scenario called for about $4.5 billion from the Saudis and $2.5 billion from the United States.