EC Says Japan car Export Restraint not Enough

Japan’s 1987 car export restraint to the European Community (EC) is not enough, EC external trade chief Willy de Clercq said.

There are also strong signs Japanese exporters are diverting cars to the EC after the dollar’s fall against the yen made their U.S. market unprofitable, he told reporters after meeting U.S., Japanese, and Canadian trade ministers.

The EC has agreed that if it detects an abnormal diversion in Japanese exports from the U.S. To the EC market due to currency movements over the past two years, it will move to prevent it, he said.

Over the period, the yen has risen against the dollar almost eight times as fast as against the European Currency Unit, he said.

Japan has set an unofficial, voluntary 10 pct rise in car exports to the EC this year as part of its efforts to stop its rising trade surplus with the Community, which hit a record 18 billion dlrs last year.

But Japanese car exports to the EC so far this year jumped over 30 pct compared to a drop of 17 pct in U.S. Sales, and a seven per cent fall globally. “We think there is some diversion there,” said de Clercq.