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International Outlook: GLOBAL WRAPUP

EUROPE

Bureaucrats in Brussels and Tokyo called it the end of Europe's car wars. But the new deal to curb Japanese auto sales in the European Community is looking like a shaky truce. The July 31 pact limits Japanese imports to the current level of 1.23 million cars and light trucks annually through 1999. However, the growing numbers of Japanese vehicles made in Europe are likely to trigger renewed battles between protectionists and free traders.

The accord forecasts output of 1.2 million such "transplants" in 1999, up from 120,000 this year. But that number is merely a projection, not an agreed limit, and the Japanese aren't pledging to stay within it. Peugeot, for one, fears the result could be deeper Japanese market inroads than envisioned in the pact, which foresees a 16% Japanese share of an estimated EC market of 15 million vehicles in 1999.

With no actual ceiling on transplants, Mazda and other Japanese companies are expected to roll ahead with plans to manufacture in Germany, the Netherlands, and Spain. And shipments from U. S. plants such as Honda's, which aren't restricted by the agreement, are a wild card that could give the Japanese an even bigger share in the EC market.EDITED BY JOHN PEARSON


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