Buy America vs. Buy Japan vs. Buy Korea

Senator Debbie Stabenow sent the following letter to President Obama:

President Barack Obama
The White House
1600 Pennsylvania Avenue, NW
Washington, DC 20502

Dear President Obama,

When we put together the CARS Program (more commonly known as “Cash for Clunkers”), we followed international law and made it apply to all cars sold in the United States – not just American cars, which is what I and most of my constituents would have greatly preferred.

Instead, we followed the law, and the CARS Program was written to abide by our international agreements. That is why it is so outrageous that Japan and Korea would have the audacity to implement similar programs that discriminate against American automakers.

In Japan, a tangle of complicated paperwork keeps American cars from being eligible. Cars purchased in their program must get “Type Approval” to qualify, but importers commonly use a different method of certification, known as the Preferred Handling Procedure. Cars with this PHP certification are not eligible for Japan’s program, thus excluding almost all American-made cars.

In Korea, any car that is 10 years or older can be turned in for a tax incentive toward the purchase of a new car. This sounds great – except that in Korea, imports face numerous non-tariff trade barriers effectively capping all foreign imports at 5 percent, meaning that American cars are essentially disqualified from the purchase program.

When you meet with Prime Minister Yukio Hatoyama of Japan and President Lee Myung-Bak of South Korea at the upcoming G-20, I strongly urge you to remind them of their obligations under the WTO. Over the years, you and I have worked together to hold countries accountable who ignore their trade agreements. We cannot allow other countries to violate trade rules and harm American Businesses and American workers, who are the backbone of our middle class.

I look forward to working with you to truly create a level playing field on trade.

Sincerely,

Senator Debbie Stabenow

I found a number of the points in here interesting:

1.  She doesn't say "WTO law" or "trade law" at the beginning, but rather "international law."  It's official -- we trade law types have now been subsumed under international law!

2.  Trade law actually had an effect -- she and others wanted to discriminate against foreign products in the U.S. legislation, but they followed trade rules instead.

3.  She alleges that Japan and Korea are discriminating against U.S. cars on a de facto basis.  Is that true?  If so, is there a violation in there somewhere?  I'm not sure I follow how the measures she refers to actually work.