May 18, 2018 / 9:11 AM / 3 months ago

Japan auto association hopes free trade, low tariffs maintained as NAFTA renegotiated

TOKYO (Reuters) - Japan’s automaking association on Friday said it hoped the country’s export partners would keep tariffs on vehicles and components low and maintain free trade relationships to promote and strengthen transparent trade.

FILE PHOTO: Newly manufactured vehicles await export at a port in Yokohama, Japan, January 16, 2017. REUTERS/Toru Hanai/File Photo

The comments come after the United States, a major market for Japanese cars, imposed tariffs on steel and aluminum imports and pushes for new terms for the North American Free Trade Agreement (NAFTA), including boosting requirements for locally produced content of cars made in the three signatory nations where Japanese automakers have factories.

The country is also mulling tougher environmental rules for imported cars to protect U.S. automakers.

“The global auto industry has a complex supply chain, so we hope to see regulations that will allow for free trade,” Seiichi Nagatsuka, an executive member of the Japan Automobile Manufacturers Association told reporters at a briefing.

“Tariffs should be low and rules should be established to maintain trade transparency.”

Nagatsuka made the comments during a roundtable event alongside incoming association chairman Akio Toyoda, who also serves as president of Toyota Motor Corp (7203.T).

The United States accounts for as much as one-third of global vehicle sales at Japan’s top three automakers - Toyota, Nissan Motor Co Ltd (7201.T) and Honda Motor Co Ltd (7267.T). But U.S. restrictions on vehicle and component imports could raise the cost of doing business in the country.

Most of Japan’s major automakers operate plants in the United States and its top three locally manufacture the majority of cars and trucks they sell in the country.

Toyota, Nissan and Honda also produce vehicles in Mexico, while Toyota and Honda also operate plants in Canada, and face risks if an updated NAFTA raises tariffs on vehicles and parts made in those two countries.

Japan is considering tariffs on U.S. exports worth $409 million in retaliation against U.S. tariffs on steel and aluminum imports imposed in March. Japan is the only major U.S. ally which has not received exemptions from the duties, Japan’s public broadcaster NHK reported on Thursday.

Reporting by Naomi TajitsuEditing by Christopher Cushing

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