Competition in the automotive industry intensified during the 1980s and 1990s. The U.S. industry was particularly hard-hit by the gas crisis of the late 1970s. Many consumers began to favor smaller, less expensive, and often more fuel-efficient Japanese cars. Here, a long line of Japanese cars awaits export from the port of Yokohama.
Sales of U.S. motor vehicles to Americans are expected to remain near the same level in the future, with about 1 to 2 percent growth per year, while foreign markets are expanding at rates that are two, three, and even ten times faster. Because exports will be essential to expanding the auto and auto parts industries, U.S. trade officials have negotiated trade agreements such as the Memorandum of Understanding with Korea (1993), the North American Free Trade Agreement (NAFTA, 1994), and the U.S.-Japan Automotive Framework Agreement (1995). These and other agreements have increased automobile and other exports to Japan, Mexico, and Korea many times over.
In 1994 the United States successfully promoted the Uruguay Round of the General Agreement on Tariffs and Trade (GATT), which helped American auto export potential because it improved access to both major and developing markets. These initiatives have helped the U.S. automotive industry achieve the highest level of exports on record. Between 1994 and 2000, shipments abroad of motor vehicles and parts increased 39 percent, reaching a value of $80.4 billion.