This is from Inside U.S. Trade:
U.S. trade officials are pressing South Korea to water down a new Korean car emissions standard or else give U.S. automakers wider leeway in complying with it, in what appears to be a second push by the Obama administration against Korean policies aimed at curbing vehicle pollution.
U.S. officials made that demand at a Dec. 15 meeting in Washington between U.S. Trade Representative Michael Froman and Korean Minister of Trade, Industry and Energy Yoon Sang-jick. The session, which constituted the third meeting of the Joint Committee under the U.S.-Korea free trade agreement, also addressed U.S. worries about how Korea is regulating cross-border transfers of financial data, and the FTA's "built-in agenda."
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Korea announced its new CO2 emissions standard at the beginning of September 2014. The standard is set to be phased in between 2016 and 2020, and requires automakers to have an average emissions value of no greater than 97 grams of carbon dioxide per kilometer across their entire fleet. The target is less stringent than what Europe is aiming for by 2020, at 91 g/km, but more restrictive than the 113 g/km U.S. standard for that year. The current Korean standard is 140 g/km.
The target is problematic for U.S. automakers in particular because they typically sell larger, higher emissions vehicles in South Korea and have not been competitive in the smaller vehicle segment. Complying with the new standard, however, would require them to market a more diverse fleet in order to meet the average.
This seems like a bit of a minefield of an issue, with the administration forced to balance out industry demands with those of environmental interest groups. Not that environmental groups would be supporting FTAs anyway, but this will surely get them more fired up in opposition.
It also makes me wonder about the relationship of FTAs and the WTO. Has this issue been raised in the TBT Committee? It certainly seems like it could be.
In related news, the latest issue of Trade, Law and Development is all about trade and climate change: http://www.tradelawdevelopment.com/index.php/tld/index
