Description: The European Community (EC) and Japan reached an agreement on trade in automobiles in July 1991. The agreement restricts exports of automobiles from Japan to the EC to 1.23 million cars per year until the end of 1999. The Commission of the European Communities estimates that Japanese transplant production in the EC will amount to 1.2 million cars per year in 1999. The Japanese appear to concur with this estimate but do not agree that it constitutes a cap on transplant investment or production. Whether the agreement covers the export of U.S.-built Japanese transplants to the EC is unclear. If the agreement covers, or has the effect of discouraging, such exports, it would be a cause for concern for U.S. policymakers. U.S. trade officials have reportedly discussed the issue with Japanese counterparts. It is unknown whether U.S. concerns have been addressed to European Community (EC) officials.

Description: The extent to which emissions from motor vehicles and the amount of sulfur in commercial gasoline should be regulated has become a controversial issue. The EPA is proposing national limits on gasoline sulfur levels which would become effective in 2004. This report provides background information on the regulation of vehicle emissions in the United States, analyzes key elements of the National Low Emission Vehicle (LEV) program and the Environmental Protection Agency's (EPA) Tier 2 proposal, summarizes major views on the proposal that have been expressed by the automobile industry, the oil refining industry, and some environmental organizations, and discusses relevant legislative activity in the 106th Congress.

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