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For Korea, A Taste Of Its Own Medicine


Up Front: TRADE WARS

FOR KOREA, A TASTE OF ITS OWN MEDICINE

South Korea's five auto makers call it the Second Wave--an ambitious, $26 billion plan to double production by the year 2000. But the Second Wave is headed for rocky shores in Europe and the U.S., the world's biggest car markets, where trade officials and manufacturers decry Korea's impenetrable trade barriers.

Both the European Union and the U.S. Trade Representative's Office are complaining to Seoul about unfair practices. They talk about slapping higher duties and other penalties on Korea, whose domestic market is so hermetically sealed that it makes Japan's look positively open. Last year, imports took a microscopic 0.2% share of the 1 million cars sold in Korea.

Every import to Korea

faces onerous approval procedures. Other barriers range from "intimidation of would-be owners of foreign cars"--the phrase used by the Brussels-based ACEA-European Automobile Manufacturers' Assn.--to levies that make imports cost 30% to 40% more than equivalent domestic cars. But there has been progress. Korea says tax audits of people who bought imports stopped last year.EDITED BY LARRY LIGHT AND JULIE TILSNER John Templeman and Laxmi Nakarmi


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