HANS GREIMEL

Are French sour grapes spoiling auto free trade?

Hans Greimel is Asia editor for Automotive News.Hans Greimel is Asia editor for Automotive News.
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TOKYO -- So much for the much-hyped South Korea free-trade agreements.

Separate deals with the European Union and United States were brokered only after much wrangling to ensure that automakers from those regions would get fair access to Korea.

But less than four months after the EU pact took effect, France is crying foul.

With hometown carmakers hit hard by the European economic crisis, the government is accusing Hyundai and Kia of dumping.

Exhibit A, it seems: French sales of the Hyundai Group surged 30 percent in the first seven months of 2012, while PSA sales fell 20 percent and Renault sales declined 17 percent, according Dow Jones Newswires.

Never mind that the Korean surge began before the EU agreement took effect in May.

Or that Hyundai-Kia sales are on the march worldwide.

Or that other EU member nations haven't joined in the complaining.

French Industry Minister Arnaud Montebourg still accused the companies of dumping and said that the EU must investigate the matter and take appropriate action.

Montebourg did not give details substantiating his claim, Dow Jones noted.

But even if nothing comes of it, France's whining bodes poorly for the new vogue of free-trade agreements. Auto powerhouse Japan wants similar free-trade deals with the EU and the United States. This will certainly throw a wrench in those talks.

And could it embolden other governments, or even Washington, to get cold feet too?

Free trade is supposed to bolster the economy as a whole. It never promises to buoy each and every industry across the board. If France's auto industry can't compete, that should be cause for reflection and buckling down. But France should at least give free trade a chance.

You can reach Hans Greimel at hgreimel@crain.com. -- Follow Hans on Twitter

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