Auto imports: target for Congress in election year
A ban on large-scale auto imports is receiving serious attention on Capitol Hill.
Cars sold in the United States, under this ''domestic content'' legislation, would have to be assembled from mostly US-made parts. The measure has been endorsed by 208 members of the House of Representatives--10 votes short of passage.
The legislation is still a long way from becoming law. But the strength of its support shows how high unemployment, mixed with an election year, is sparking protectionist brushfires that complicate the Reagan administration's efforts to promote free trade.
''In effect, this bill says, 'Let's hunker down and protect ourselves from the world,' '' says Harald Malmgren, a Washington trade consultant. ''Its passage would blow a hole in the side of administration trade policies.''
''This is a way to provide jobs for American workers,'' counters Gene Casraiss, a legislative aide for the United Automobile Workers, who says his union backs the move ''as strongly as we've ever supported legislation in the life of the UAW.''
The proposed Fair Practices in Automotive Products Act, sponsored by Rep. Richard L. Ottinger (D) of New York, would require any manufacturer selling more than 500,000 cars and light trucks in the US for model year 1983 to produce 30 percent of its components in the country. Smaller makers would face less stringent standards.
By 1985 and thereafter, 500,000-unit sellers would have to meet a 90 percent domestic content requirement. Companies that peddle 200,000 vehicles would face a 75 percent standard.
In fiscal year 1981, Toyota sold 536,912 autos in the US, according to the Japan Economic Survey. Datsun sold 457,062; Honda, 362,649. A Volkswagon of America spokesman says VW moved 278,450 units in calendar 1981.
The Auto Act would, in effect, prohibit these imports. To continue selling in the US, foreign manufacturers would be forced to open factories here.
''We're not at all trying to limit imports. What we're trying to say is if they want to have markets here, they should start putting some of their plants here,'' says a congressional aide who helped draft the legislation.
Volkswagon, an oft-cited example of such decentralization, now has an assembly plant in Pennsylvania, a stamping plant in West Virginia, a multipurpose complex in Texas, and plans for a factory in Sterling Heights, Mich. The UAW claims North American content of VW Rabbits ''is approaching 70 percent.''
Passage of this Auto Act would create 868,000 jobs in auto production and supply, the UAW says.
Opponents counter the bill would deprive consumers of the cars they want, at the price they want to pay, and coddles the US industry against the cold rigors of free competition.
''It's an impossible bill,'' grumbles T. Albert Yamada, a Toyota lobbyist. ''It's basically a method of sending a message to Japan'' to show restraint in the US market.
Although 208 House members have signed on as co-sponsors of the bill, support is widely seen as political theater.
''It's a necessity for a number of congressmen to sign up for this bill. That's different than voting for it to become law,'' says Jeffrey Schott, director of a trade project at the Carnegie Endowment for International Peace.
Only 11 Senators support a similar measure. If passed, the bill faces an almost certain presidential veto. Mr. Reagan's special trade representative, Bill Brock, recently said that domestic content requirements are ''a cop-out'' and ''don't solve anything.''
The White House hopes to make trade liberalization a central topic at the Versailles economic summit in June. In November, at a ministerial meeting of the General Agreement on Tariffs and Trade, Mr. Brock says he will push for freer trade in services, high-technology, and agricultural goods.
But outbreaks of protectionism, such as the domestic content bill, are making it tough for the administration to show off America as a paragon of free markets.
One protectionist fire has already been partially doused. Administration officials, working with the Senate Finance Committee, have toned down the wording of pending ''reciprocity'' legislation, which calls for retaliation against countries who shutter their markets to US goods.
But other areas are smoldering in the background. On June 10, the Commerce Department is expected to rule European steelmakers have been unfairly dumping steel in the US market. Common Market officials have threatened retaliation. Talks have begun on voluntary restraints, in an effort by the administration to defuse the issue before the Versailles summit.