II 109th CONGRESS 2d Session S. 3830 IN THE SENATE OF THE UNITED STATES August 3, 2006 Ms. Stabenow (for herself and Mr. Levin) introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To prevent unfair practices and ensure an open market in the automobile industry, and for other purposes.

1.

Short title

This Act may be cited as the South Korean Fair Trade Act.

2.

Purpose

The purposes of this Act are to level the playing field for domestic manufacturers and workers engaged in the production and interstate sale and export of motor vehicles until the conditions outlined in this Act are implemented by the Government of South Korea and the South Korean automobile industry.

3.

Findings

Congress makes the following findings: (1)The Government of South Korea imposes an 8 percent tariff on United States motor vehicle imports, 3 times the United States tariff imposed on South Korean motor vehicles. (2)Since 1995, the United States has engaged in a negotiating process with the Government of South Korea to obtain fair access for United States motor vehicle producers and manufacturers to the Korean market. The negotiations have included a 1997 investigation under section 301 of the Trade Act of 1974, and the designation of South Korea as a priority foreign country under section 310 of that Act because of South Korea's barriers to foreign motor vehicle imports. (3)South Korea has failed to recognize the major goals of the 1998 Memorandum of Understanding, which include— (A)increasing foreign-made motor vehicle market access; and (B)taking no further measures to obstruct foreign-made motor vehicles from market access. (4)South Korea discriminates against United States produced motor vehicles by adding an additional tax on vehicles with large engines, even though the 1998 Memorandum of Understanding provided for a 30 percent reduction on this special consumption tax. (5)South Korea maintains a strong Buy Korea bias in its markets, and uses public relations campaigns to convince the public not to buy foreign produced motor vehicles. (6)Out of 1,014,000 motor vehicles sold in South Korea in 2005, only 31,000 (2.72 percent) were imported from other countries. The South Korean motor vehicle market is by and large closed to foreign manufacturers, whose combined share is less than 3 percent. South Korea has the lowest import penetration percentage of any developed country in the world.

4.

Freeze of existing duties on Korean motor cars and motor vehicles

Notwithstanding any other provision of law, the duty in effect on July 31, 2006, on motor cars and motor vehicles imported directly or indirectly from South Korea under heading 8703 or 8704 of the Harmonized Tariff Schedule of the United States shall remain in effect until the date that is 15 days after the date on which the Secretary of Commerce certifies to Congress that at least 20 percent of the total number of units of motor cars and motor vehicles sold in South Korea each year are made in a country other than South Korea.