Proposed EU/US Free Trade Agreement Could Lead to Cheaper Cars

The European Union and United States will begin discussions on a free trade agreement around June, according to a report from Reuters. If successful, it would create one of the largest free trade zones in the world that would cover a third of the world's trade.

In the automotive world the agreement could mean billions of dollars in annual savings. Completed cars and trucks imported into the US carry a 2.5% tariff and pickup trucks carry a 25% tariff, and there is an EU car tariff of 10% and individual tariffs from the EU member states. 

Matthias Wissmann, head of the German Automobile Industry Association, says that if the measure is successful, it could reduce car prices by hundreds of Euros. Wissman said that German automakers pay about €550 million a year to export cars to the US and €410 million to import cars from the US. 

That is only considering only the cost of importing and exporting completed cars. The tariffs on automotive parts vary by their material between countries, and the loss of these tariffs could reduce prices even further. 

The biggest roadblock for the free trade deal according to experts involves foodstuffs. The use of genetically modified foods and hormones in meat are considered mostly taboo in Europe. 

Source: Focus.de