Democratic lawmakers sound alarm on Japan joining trade talks

WASHINGTON Fri Mar 15, 2013 7:11am EDT

U.S. President Barack Obama delivers remarks at the Organizing for Action dinner in Washington, March 13, 2013. REUTERS/Yuri Gripas

U.S. President Barack Obama delivers remarks at the Organizing for Action dinner in Washington, March 13, 2013.

Credit: Reuters/Yuri Gripas

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WASHINGTON (Reuters) - Four dozen Democratic lawmakers on Thursday expressed concern about Japan joining free trade talks with the United States and urged President Barack Obama to maintain U.S. tariffs on Japanese autos and trucks if Tokyo does enter the negotiations.

The plea came one day before Japanese Prime Minister Shinzo Abe is expected to announce Japan's interest in joining talks on the Trans-Pacific Partnership (TPP), a proposed free trade deal between the United States and 10 countries.

That worries Ford Motor Co and other Detroit-based automakers, which fear losing more sales to Japanese imports. A U.S.-led push to finish the TPP pact by the end of this year adds to the carmakers' anxiety.

"In an industry with razor-thin profit margins, the elimination of the 2.5 percent car tariff (as well as the 25 percent truck tariff) would be a major benefit to Japan without any gain for a vital American industry, leading to more Japanese imports, less American production and fewer American jobs," the lawmakers said in a letter to Obama.

The group included Representative Sander Levin, the top Democrat on the House of Representatives Ways and Means Committee. He is from Michigan and one of the fiercest defenders of the U.S. auto industry in Congress.

His brother, Senator Carl Levin, another Michigan Democrat who chairs the Senate Armed Services Committee, also signed the letter, along with eight other senators and nearly 40 members of the House.

"What the letter does is sound an alarm about Japan's participation" in the TPP, Sander Levin said in an interview with Reuters.

He said he was skeptical that negotiations could tear down regulatory and other non-tariff barriers that he said have long kept American autos out of Japan's market.

Levin, who has a history of voting for most trade agreements, played a major role in persuading the Obama administration to renegotiate auto provisions of a free trade pact with South Korea.

The revised pact, which took force one year ago, allowed the United States to keep its 2.5 percent tariff on South Korean autos until the fifth year and to keep its 25 percent tariff on South Korean light trucks until the eighth year, when it will begin to be phased out.

But Levin and the other lawmakers argued in their letter that the same approach could not be taken with Japan.

"While some have compared this challenge to the one we faced with Korea, the Japanese auto market is more impenetrable, the history of formidable barriers and imbalanced trade is longer, and the magnitude of the problem is far greater than with Korea," the group said.

"Despite being the third-largest auto market in the world, Japan ranks last among OECD (Organization for Economic Cooperation and Development) members in terms of auto market import penetration, at 5.9 percent in 2012," they said.

The lawmakers blame those low import numbers on a web of barriers, including currency manipulation, discriminatory taxes, onerous and costly certification procedures for foreign cars and unwillingness by Japanese auto dealers to sell foreign cars.

Meanwhile, Japan is concerned about being pressured in the TPP talks to open its long-protected markets for rice and other politically sensitive farm products.

In the aftermath of Abe's recent visit to Washington, there have been rumors the two sides have already struck a deal that would let the United States keep its auto tariffs in exchange for Japan's protecting some agricultural products.

Levin said he had not heard anything from the administration to confirm that. "We have no indication from the administration there is any such deal," Levin said.

(Reporting by Doug Palmer; Editing by Kenneth Barry and Dan Grebler)

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Comments (7)
morbas wrote:
Ideal Free Trade Import Fee: 99% of the originating county effective foreign import fee, And where multinational parts are used 99% of the highest import fee of all parts of the import. Thus the trading partner sets his own rate, now not political nor corruptable.

Effective foreign import fee includes all foreign factors of trade.

Mar 15, 2013 8:43am EDT  --  Report as abuse
bobber1956 wrote:
Japan is providing ALOT of jobs, paying ALOT of taxes, and propping up ALOT of local and State economies by producing autos here. They have EARNED a chair at the table. All the lib dems are doing is trying to give a hand to the unions that are doing pretty much nothing for the good of this country any longer. This is not about free trade, once again it is more biased scum bag cronyism by the scum bag liberal democrats trying to protect their party donors.

Mar 15, 2013 9:24am EDT  --  Report as abuse
morbas wrote:
All taxes are paid by consumers, JAPAN nor the manufactures in reality do not pay any taxes. That Citizens United falsehood originates from extreme right plotting to ursurp the peoples rights of democratic government.

Mar 15, 2013 10:01am EDT  --  Report as abuse
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