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Kildee and Levin Lead Effort of Over 200 Members to Warn United States Trade Representative of Back Door Threat to American Pickup Truck Manufacturing

Location: Washington, DC

Kildee and Levin Lead Effort of Over 200 Members to Warn United States Trade Representative of Back Door Threat to American Pickup Truck Manufacturing

WASHINGTON - Today, Congressmen Dale Kildee (D-MI) and Sander Levin (D-MI), along with Representatives Thaddeus McCotter (R-MI) and James Walsh (R-NY), spearheaded an effort to protect American pickup truck manufacturing. Joined by over 200 Representatives, the four Members sent a letter today to the United States Trade Representative (USTR), warning of the potential negative impact if bilateral negotiations with Thailand led to a change in U.S. tariff provisions. The U.S.-Thailand Free Trade Agreement (FTA) negotiations could jeopardize the U.S. pickup truck industry by permitting third-party nations to use Thailand as a back door into the U.S. automotive market.

Ten pickup truck assembly plants in eight states which employ roughly 20,000 American workers would be put at immediate risk, not to mention the thousands of jobs in other fields that are dependent on domestic pickup truck production," Kildee said. "These harmful negotiations are endangering the jobs of U.S. autoworkers and the future of the American auto industry."

The proposed U.S.-Thailand FTA shows a flaw in the Bush Administration's approach to international trade policy," stressed Rep. Levin. "Foreign automobile producers from outside Thailand would have special access to the U.S. market, yet their home countries would maintain barriers that keep out U.S. automobile exports, undercutting U.S. efforts to open foreign automobile markets in the WTO negotiations.

The letter calls for any automotive negotiations to be multilateral to ensure that any granting of access to the U.S. market is based on the reciprocal gaining of access to foreign markets for U.S. manufacturers. Specifically, the members cautioned the USTR about the potential impact of granting Thailand privileged access to critical segments of the U.S. automotive market as part of a U.S.-Thailand FTA while foreign markets maintain their barriers to U.S. autos. By using Thailand as their export platform, third-countries such as Japan, South Korea, and India would not be required to reduce their tariff and non-tariff barriers vis-à-vis American automotive products, effectively bypassing the tariff for their products.

It would be a classic case of unfair trade," Kildee said. "Third-party nations could easily circumvent the American tariffs on their products by using Thailand as the jumping-off point to flood the American market with pickup trucks, directly threatening American producers."

Producers from outside of Thailand are already investing in production there, hoping to make it their global export platform," noted Rep. Levin. (See attached)

Thailand is already the world's second largest producer of pickup trucks, and the country's Board of Investment has actively been recruiting automobile producers from outside of Thailand to produce automobiles within their borders. Some of these producers have cited Thailand's privileged access to foreign markets through FTAs as a rationale for establishing production there.

Lifting the tariff on imported pickup trucks from Thailand would only exacerbate the damage that was already done to the U.S. auto industry when NAFTA eliminated the tariff on imported pickup trucks from Mexico," Kildee concluded. "We must scrutinize any proposal to reduce or eliminate tariffs on foreign auto imports before more damage is done to the U.S. automobile industry."

The U.S. automotive sector faces many tariff and non-tariff barriers to U.S. goods," added Rep. Levin. "We must focus a global spotlight on knocking down these barriers rather than accepting a piecemeal approach that disadvantages U.S. manufacturers."

Kildee and Levin believe all major automobile producing nations should be included in any negotiations regarding changes in automobile tariffs.

Attached is a fact sheet on the Thailand auto market. A copy of the letter is available upon request.

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