February 07, 2012

The Wall Street Journal and Car Scoop are out with reports today focused on the Trans-Pacific Partnership (TPP) trade deal discussions and opposition to Japan’s inclusion in the agreement, given Japan’s unfortunate history of closed-market trade practices related to automobiles in particular.

The Journal report (“Japan's Bid to Join Asian Trade Pact Faces a Leery U.S.”) sizes up the opposition to Japan’s inclusion in TPP negotiations and then includes a summary from Matt Blunt, president of the American Automotive Policy Council, on the substance of why Japan’s inclusion is problematic for true free-trade advocates.

From the Wall Street Journal report:

Japan's push to enter a broad Asia-Pacific trade pact faces one of its toughest challenges this week: acceptance from Washington.

Opposition from American manufacturers and unions, combined with doubts about Tokyo's ability to deliver on promises, could create obstacles.

"Given the systemic nontariff trade barriers that exist in Japan and a history of currency manipulation, it's really difficult to see how you address those in the context of the TPP negotiations," Matt Blunt, president of the American Automotive Policy Council, said in an interview.

In addition to pointing out opponents believe Japan’s inclusion in the TPP agreement will delay negotiations and implementation of the agreement, the Car Scoop report itemizes Japan’s adherence to closed-market policies that hurt U.S. automakers.

From today’s Car Scoop report:

In plain English, Detroit's Big 3 will fight against including Japan in the free-trade agreement talks unless it opens up its car market to their products.

To reinforce his argument, Blunt pointed out that Japan ranks last in auto imports among the 30 countries that participate in the Organization for Economic Cooperation and Development.

“Japanese automakers control more than 95 percent of their domestic auto market”, he said. "All other OECD members, except Korea, have an import market share of more than 40 percent."

The American auto industry has undergone a dramatic restructuring over the past several years, making the industry more competitive in a global market—an effort that could be jeopardized by Japan’s inclusion in the TPP.

The AAPC believes providing preferential trade benefits to Japan while they continue to embrace closed-market policies would only serve to undermine the competitive gains made by American automakers.”

The full Wall Street Journal report can be found here

The Car Scoop report can be found here