The government has decided to exempt only foreign carmakers from which Korea imports less than 1,000 cars a year between 2009 and 2011 from regulations on gas mileage and greenhouse gas emissions for three years, according to a government document the Chosun Ilbo obtained on Tuesday. The decision came as Seoul renegotiates a much-delayed free trade agreement with the U.S., which wants the bar raised to 10,000 vehicles a year to benefit gas-guzzling American cars.
For those which export between 1,000 and 4,500 cars to Korea, the government will relax environment regulatory standards by 10 percent only until 2015. Washington wanted Seoul to ease the regulations by 25 percent.
The Environment Ministry originally planned to include these eased regulations in a bill on the gas mileage and greenhouse gas emission it announced on Sept. 30, but it excluded them considering the ongoing talks with the U.S.
If Seoul has its way in the negotiations, only GM out of the Big Three U.S. automakers, which exported 589 vehicles to Korea in 2009, will be exempt from the environmental regulations for three years after they take effect. Ford and Chrysler, which exported 2,967 and 2,255 cars respectively, will benefit from relaxed regulations for four years from 2012 until 2015.
Besides American carmakers, eight out of 14 foreign automakers including Japan's Mitsubishi and Subaru, Germany's Porsche and Sweden's Volvo, will either be exempt or benefit from relaxed regulations.
But six -- Honda, Nissan, Toyota, Audi Volkswagen, BMW, and Mercedes-Benz -- will be subject to the same regulations as Korean automakers since their exports to Korea exceeded 4,500 cars as of 2009.
"Controversy over reverse discrimination against Korean automakers would be inevitable" if the bar was raised to 10,000 cars, a government official said, because that would mean all but two foreign automakers -- BMW and Audi Volkswagen -- would be exempt. He added the government made the decision "balancing the U.S. request with international norms."
A law on low carbon emission and green growth that took effect in April requires average gas mileage to be more than 17 km/l for 10-seater or smaller passenger cars and vans and greenhouse gas emissions of less than 140 cubic m/km. The regulations are to be phased in starting in 2012.
The official said, "The two countries are engaging in additional talks as the U.S. has asked us to ease the environmental regulations by 25 percent," which would mean minimum gas mileage of 12.75 km/l and greenhouse gas emissions of less than 175 cubic m/km, instead of 10 percent. He said they will be able to wrap up the talks by the end of this month.
The two countries have been negotiating to revise the auto provisions since U.S. President Barack Obama in June called for a "new discussion" on the FTA after the U.S. Congress and automakers complained that Korea's environmental regulations are a kind of trade barrier because they are tougher than American rules.