FRANKFURT -- An auto industry without borders.
That is the dream in C-suites from Detroit to Munich to Tokyo, now that the political stars appear aligned for free-trade treaties that could knock down some of the walls dividing the three capitals of the global auto market.
Top trade negotiators from the United States, Europe and Japan have circled the globe this year to talk about rewriting their trade laws. Seeing a once-in-a-generation chance to lower costs and ease regulatory headaches, automakers have rushed to the table, asking to scrap tariffs, market barriers and conflicting standards that affect the basic economic calculus of which cars get sold and where.
Their effort could bear fruit soon. The White House has promised a 12-country Pacific Rim trade deal by the end of 2013. Europe will be next, with talks over the "coming months or year, or a year and a half or however long it takes to get to a good deal," U.S. Trade Representative Michael Froman said last week on CNN.
The negotiations are in their early stages, and many points of contention remain, including doubts about the wisdom of aligning regulations and whether Japan's market is truly open to foreign automakers.
But the auto industry's top executives are already imagining ways the deals could cross-pollinate their showrooms -- making it cost effective to sell European wagons and minicars in the United States, for example, or to send U.S.-built SUVs and muscle cars to Europe.
Ultimately, the impact could ripple around the world, creating a new auto production base in a country such as Malaysia, while undercutting the advantage that existing hubs such as South Korea and Mexico have gained from their own free-trade deals.
Even as automakers call for a market without borders, one of their principal aims is to jointly erect a firewall against competitors from South Korea -- and, soon, China and India. The cost savings from reducing tariffs and streamlining regulations, they say, are a matter of national economic interest.
"Our cost is high, and their cost is low," said Wolfgang Schneider, European vice president for governmental affairs at Ford Motor Co. "How do we get our cost down? What is the way we can regain cost-competitiveness on the international market? This is about combining."