January 13, 2010 / 8:23 AM / 10 years ago

Japan dismisses U.S. concerns on car scrappage scheme

TOKYO (Reuters) - A Japanese trade official dismissed U.S. concerns about the country’s car scrappage incentive scheme on Wednesday, saying the program does not discriminate against imported cars.

U.S. Secretary of State Hillary Clinton told Japanese Foreign Minister Katsuya Okada when they met on Tuesday that concerns are rising in the U.S. Congress about Japan’s incentive scheme, Japanese media reported.

Under the scheme which has helped increase demand in Japan’s car market, the world’s third-largest, consumers get cash to replace old cars with those meeting specified fuel economy standards.

“The current Japanese program does not discriminate between domestic and international (products), and we do not think there are any problems in regards to the World Trade Organization,” said a Japanese trade ministry official who declined to be named.

Consumers can apply for the incentives with any car as long as they meet certain environmental standards, he said, adding that some cars made by European firms such as Daimler (DAIGn.DE), BMW (BMWG.DE) and Volkswagen (VOWG.DE) met such conditions.

“We will seek the understanding of the United States by listening closely to its views and explaining ours well,” he said.

Last week, U.S. Congresswoman Betty Sutton introduced a resolution calling for the U.S. Trade Representative to start talks with Tokyo and urged Washington to bring a WTO case against Japan if it does not open up its program to American cars.

U.S. automakers Ford Motor Co (F.N), General Motors Corp GM.UL and Chrysler CCMLPC.UL complained to U.S. Trade Representative Ron Kirk in December that Japan’s fleet renewal program effectively barred U.S. firms from participating.

The Japanese scheme, under which the government pays up to 250,000 yen ($2,750) in cash to people replacing vehicles more than 13 years old, started last April. It is scheduled to end in March but is likely to be extended by six months.

Reporting by Yoko Kubota; Editing by Raju Gopalakrishnan

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