Recently, the WTO Doha round non-agricultural products (000061) market access negotiating group urges negotiators at the end of the car market entry threshold. This means that the automobile market between the Member States will further open up the domestic car manufacturers difficult from government barriers to trade in for special protection, must be involved in international competition.
Fast import cars
DRC study results show that the automotive industry is a 1: 10 in the industry, the automotive industry 1 unit of output, you can drive the national economy as a whole, the overall increase in all sectors of 10 units of output.
According to the national development and Reform Commission statistics, China automotive industry GDP share of GDP has been more than 8%, if the entire upstream and downstream sectors of the automotive industry on the national economy by stimulating effect of far more than 10%. It has been said that the car has become pull consumer's first engine. For others, the automotive industry is equally important.
During the Uruguay Round negotiations, the automotive market entry threshold is the focus of the negotiations. Japan, the United States, EU and other car-producing countries to reduce motor vehicle and parts of import tariffs, intended to make its technical superiority, occupying the international market. While the technology behind developing countries seeking to protect the domestic automobile industry, would not significantly open car market. Finally, Member States agree to further reduce automobile import tariffs, and prohibition of import automotive setting non-tariff barriers.
These agreements did not prevent the Member States on the protection of local automobile manufacturers in disguise. In 1995, the United States under the 1974 Trade Act to impose additional tariff Japan Automobile; 1992, Poland in accordance with the EC Treaty, signed on motor vehicles from EC import tariff on imported from other countries tariffs; in 1995, the Government of Brazil requested in the foreign manufacturers have to use a certain proportion of the local parts and exports must achieve the required scaling; Philippines Government requirements in the country of registration of foreign manufacturers have to use a certain proportion of home accessories, and in Exchange, "from your self", that can be used only for the purchase of foreign currency export of the imported vehicles or accessories.
From 1993-1996, the Indonesia Government launched a series of "national car revitalization plan. For example, if you import a vehicle using a certain proportion of Indonesian production accessories, then enter the Indonesian market can enjoy tariff relief treatment, use more Indonesian production accessories, the lower the tariffs; for some brands of luxury cars, if its use in Indonesian 60% of production accessories, the sales tax rate is 20%, if there is no production of parts in Indonesia reached 60%, the sales tax rate is 35%.
India has been on its domestic automobile manufacturers to give special protection, had to pay the balance of trade against the limit imposed on imported cars. In December 1997, India has introduced a new measures, only those with India Government signed a memorandum of joint venture enterprises to obtain the production or import of the automobile license. The memorandum calls foreign producers must undertake in the first three years at least $ 5 million capital injection, you must use a certain proportion of India production parts, motor vehicle and its accessories must be maintained and export balance.
In 1965, the United States and Canada signed the Treaty, if United States car dealer sales Canada production cars remain within a certain ratio, and its "Canada-added" reaches a certain percentage, you can enjoy zero import tariff. The tariff preferences are only United States producers, producers in other countries (such as Japan) unable to get.
The Chinese Government has given the domestic automobile industry must be protected. 2004-2005, the State has introduced the automobile industry development policy and imported parts management policies, requirements if assembled vehicle's total value of imported accessories reaches 60% of the price for the car, or use a set number of core components, or use a set of Assembly parts, in accordance with the import vehicle tax rate (25%) taxes on the import of parts, accessories and more in the import rate by about 10 percentage points. At the same time, in the management of the use of imported accessories to impose restrictions.
Visible, import car trade barriers in various forms, its fundamental purpose is to restrict foreign producers, to the local producers to provide special protection. Although the WTO agreement on trade-related investment measures (TRIMS) on some non-tariff barriers specifically prohibited, the GATT (1994) and the agreement on trade in services is also more involved, but the auto industry's profits and in the important position in the national economy, it is difficult to make WTO member countries to handing the domestic market.
Action kicked open the entry threshold
There are barriers to action. As of now, the WTO has accepted the 17 cases involving automobile market access cases, of which seven were substantive proceedings. These cases include: 1996 in October and November, the EU and Japan respectively prosecution Indonesia; July and August 1998, the EU and Canada; respectively against Japan in October 1998 and June 1999, the European Union and the United States prosecuted India respectively; in March 2006 to April, the European Union, the United States and Canada against China, respectively. 10 cases or disputes parties reached a settlement agreement, either.
The car is different from other goods, vehicle importation and parts imported from the customs measures for foreign investments subject to host country of the adjustment of the investment policy. As early as in the Uruguay Round negotiations, the European Member States wish to establish a uniform investment policy of investment in developing countries, open market, and finally reached a compromise agreement on TRIMS of merely requires Member States not to force foreign investors use the host's local products or import-substituting products, could not claim balanced and export, cannot impose restrictions on other foreign exchange investment policy at present there is no conclusion.
All in all, these cases there are two common features. First, the prosecution's case, that is the prosecution violated the TRIMS Agreement, no
In accordance with the GATT (1994) "on imported cars to give national treatment and MFN treatment; the second is in favour of the prosecution have not been, and are reluctant or finally reluctantly complied with a ruling.
These proceedings have a demonstration effect, since 2007 is no longer accepting the WTO. The Member States on the non-tariff barriers to imports of motor vehicles, increasing the degree of market opening, the import duty is also declining trend. It can be said that the WTO proceedings last kicked open the imported car market access threshold.
Innovation is the only way for China's car industry
Mutual opening up of markets is not equal to each other. In the face of Japan, the United States and the EU and other automotive technology powers, developing national automobile industry pressure, and international brand manufacturers to establish joint ventures, with the latter's brand and technology advantage to a living space. Either in China or Southeast Asia, Europe and Japan brand is everywhere in the automotive market. Them in developing countries and earn enough money.
According to statistics, 2009 China Automotive companies have earned pot full of pot full of joint ventures is still the main source of profit; SAIC group to 272 million of annual sales leads the Chinese automobile market, an increase of sales volume increased by 57%, net profit increase of 900%, which Shanghai VW, Shanghai GM, and other joint brand in total sales volume of more than 90%. You can imagine, foreign investors get a huge income.
China has more than last year, the United States became the world's largest automobile market. Germany, Japan's producers prepare for enormous investment in the Chinese market. Many experts believe that China's automobile industry ROI remains considerable, competition will become more and more fierce. There are also people who think China car should get out and seize the international market.
But in my view, since foreign producers are staring at China's huge market, we first should take advantage of its geographical, keep the domestic market, and then consider the international market, not the kind to others, abandoned its own field ". Of course, China has a clear comparative advantage of some of the vehicle or parts production while taking both domestic and international markets are also fine.
In the open market conditions, the Chinese automobile industry cannot obtain directly from the Government, the only way out is the protection of independent innovation, and constantly improve quality. Fortunately, in recent years, China's electric (600795) moving automobile started relatively early, rapidly, but unfortunately, most of the car battery core part is still rely on imports, subject to the foreign countries.
This article was "China economic weekly" column, all rights reserved. Lohan-Wei, PhD, the China economic weekly "columnist, is committed to international economic law and WTO law studies, the long-term focus of Sino-US trade relations.