German auto industry pleads for free trade in Detroit

Attendees look at the the Volkswagen lineup of cars and SUVs during the 2017 North American International Auto Show in Detroit, Michigan on January 9, 2017 (AFP Photo/SAUL LOEB)

Detroit (AFP) - Germany's auto industry on Monday argued for freer trade within North America and between the United States and Europe, as global auto brands gathered to showcase their wares in Detroit.

The plea at the opening of the annual Detroit auto show comes as auto makers brace for continued confrontation with US President-elect Donald Trump, who has threatened to slap import tariffs on several major manufacturers for selling Mexican-made cars on the US market.

At a news conference at the start of the show, Matthias Wissmann, head of German auto federation VDA, underscored that member companies, which include BMW, Volkswagen and Daimler, had quadrupled production in the US since 2009, producing 850,000 vehicles in the United States in 2016.

"That is a clear commitment to the US as an industrial location," said Wissmann, reiterating the VDA's favorable stance on free-trade.

"For us, the question of how Washington will value globalization in the future is particularly important," he added, pointing to the North American Free Trade Agreement, which links Mexico, Canada and the United States.

"It would certainly also be smart not to call the absence of import duties within NAFTA into question."

VDA members produced 425,000 units in Mexico in 2016, according to Wissmann.

Wissmann also said only 41 percent of US production by German automakers remained in the United States, as the majority is for export.

"That means that just over half of the jobs that the German manufacturers have created here in their US plants depend on exports," said Wissmann, who put the number of US workers employed by German auto makers and parts suppliers at 110,000.

Wissmann also noted that the proposed trade pact with the European Union, the Transatlantic Trade and Investment Partnership or TTIP, would allow US-built cars duty free into the EU market.

Near-term prospects for the adoption of the TTIP appear slim to nil, with talks at a standstill and Trump showing no sign of changing his antipathy to such trade deals.

"We assume that the new administration will aim to strengthen US industry," Wissmann said. "We hope that the new president will be open to this trade-policy interest of his domestic industrial base."