Business groups and labor organizations both called on the Trump administration Monday to pressure Japan to open up its markets to U.S. vehicles as part of trade talks, saying the nation has long maintained one of the most closed markets in the developed world.
The call comes as the administration is holding off on possible auto imports to allow for talks with Japan and the European Union. Avoiding those tariffs is widely believed to part of the reason Japan has agreed to talks.
While at odds on many issues regarding a proposed U.S.-Japan trade deal, the business and labor groups were unanimous in decrying Japan’s policies on auto imports during a public hearing held by the U.S. Trade Representative’s Office Monday. While Japan has basically no direct tariffs on vehicle imports, it uses other means to keep them out, the groups argued. The hearing was held to allow the public to weigh in on any proposed deal.
“Japan’s auto market is the world’s third largest, behind only China and the United States,” said Matt Blunt, president of the America Automotive Policy Council, which represents Ford, GM and Fiat Chrysler Automotive. “Yet Japan, through non-tariff barriers imposed on foreign automakers, maintains one of the most closed auto markets in the developed world.”
Japan doesn’t accept U.S. standards for motor vehicle safety, said Charles Freeman, representing the U.S. Chamber of Commerce and U.S.-Japan Business Council. As a result, U.S. manufacturers are forced to spend resources on “burdensome compliance standards” and find it difficult to partner with Japanese companies on “next generation auto technologies.”
United Auto Workers representative Desiree Hoffman warned that as a result, the U.S. must avoid any deal that lifts its own auto tariffs until the non-tariff barriers are removed. “These barriers have created an uneven playing field, so much so that for every car that the U.S. exported to Japan in 2017, Japan sent 100 back. Any loosening of the [U.S.] 2.5 percent automotive or 25 percent light truck tariff would further direct Japan’s overcapacity to our shores, exacerbating the problem,” she warned.
Blunt echoed the point, warning against any concessions that would further open the U.S. market to Japanese imports “unless and until there is evidence that Japan is truly committed to opening its auto market to U.S. vehicles.”
Business groups at the talks also called for strong provisions to prevent currency manipulation and language to improve access for pharmaceutical products in Japan.
