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Hyundai joins auto coalition supporting Nafta

Oct 26,2017
Global auto companies operating in the United States, including Korea’s Hyundai Motor, formed a coalition aimed at saving the North American Free Trade Agreement (Nafta).

Major automotive companies on Tuesday, local time, created “Driving American Jobs,” which was created “to safeguard American jobs in the automotive industry” by preventing the United States from withdrawing from Nafta, according to local reports.

Members include Hyundai, Korea’s top auto maker, which has a large manufacturing plant in Alabama, and General Motors, Ford, Volkswagen and Toyota. Hyundai’s assembly plant in Alabama employs some 3,000 local workers to make engines and vehicles, according to the company.

According to a statement by the coalition, this is the first time in history that auto companies in the United States decided to join forces to protect a trade agreement.

The formation of the coalition comes as U.S. President Donald Trump continues to threaten to withdraw from the pact among the United States, Canada and Mexico. Major car companies have supply chains that include all three countries, manufacturing parts in Mexico to assemble in the United States, for instance.

Last week, Trump reportedly insisted that rules of the origin for the auto industry be revised.

Under the current version of the pact, 62.5 percent of a vehicle’s production must come from North America to avoid a tariff in the U.S. market. The Trump administration is reportedly seeking to propose more draconian requirements, including a U.S. origin rule that requires a certain portion of the production be done in the United States for auto companies to avoid tariffs.

Coalition members say that changes that diminish Nafta would hurt the U.S. auto industry, which shipped autos and parts worth some $137 billion to members of Nafta and other regions in 2016, and some seven million jobs that depend on the industry. It would also affect U.S. auto dealerships, which are responsible for over a million jobs.

“Nafta has played a key role in the growth and vitality of the U.S. auto industry,” said the coalition through the statement. “The United States produced one million more cars in 2016 than in 1993, the year before Nafta took effect. Most economists agree that withdrawing from Nafta will re-establish trade barriers that will hurt the U.S. economy and cost jobs.”

“Our biggest concern is for American workers and customers,” said Jennifer Thomas, Vice President of Federal Affairs at the Alliance of Automobile Manufacturers. “Pulling out of Nafta would lead to a decrease in vehicle production, a decline in jobs and an increase in what our customers spend when buying a new vehicle.”

BY CHOI HYUNG-JO [choi.hyungjo@joongang.co.kr]