Trade minister Toshimitsu Motegi said Tuesday that a recent deal on car trade between Japan and the United States won’t necessarily leave Japanese companies at a disadvantage to their South Korean rivals.
The deal was reached as part of the process to win U.S. approval for Japan’s participation in the negotiations for the Trans-Pacific Partnership regional free-trade accord, with Tokyo seen as having made concessions on auto issues to which Washington is sensitive.
While stressing that entry to the TPP talks is an important avenue for Japan to capitalize on Asia’s economic growth, Motegi, who heads the Ministry of Economy, Trade and Industry, told a news conference, “I think the (Japan-U.S.) agreement is not necessarily disadvantageous compared with the U.S.-South Korea free-trade accord.”
To the disappointment of major Japanese automakers, Japan and the United States agreed that the abolition of U.S. auto tariffs will be postponed as much as possible — and with a longer moratorium than under the U.S.-South Korea free-trade pact.
The U.S. is Japan’s largest auto export market, and Japanese manufacturers will be in a disadvantageous position after U.S. auto tariffs on South Korean automobiles are lifted in 2016.
But Motegi indicated that Japan has gained the upper hand in some aspects, referring to South Korea’s agreement with the United States that allows for 25,000 cars per U.S. automaker to be imported into South Korea, provided they meet U.S. safety standards. “We have not made such an agreement at all,” the METI chief said.
U.S. farmers salivating
U.S. farmers pushed Monday in Washington for Japan to join the TPP trade deal as a way to gain access to the world’s third-largest economy.
“We’re just giddy about the potential here,” Nick Giordano, vice president and counsel for international affairs at the National Pork Producers Council, said Monday of Japan’s probable inclusion in the 11-nation TPP. “TPP with Japan becomes the single most important trade negotiation ever for the U.S.”
Agricultural groups representing producers and suppliers of pork, rice, wheat, corn, potatoes and dairy products met Monday in Washington to support the regional agreement as a means to lower tariffs and overhaul regulatory barriers that they say limit U.S. farm exports to Japan.
By adding Japan, the U.S. would gain an accord with its fourth-largest trading partner and the biggest economy in Asia after China. The TPP would embrace about $26 trillion in goods and services a year. The 27-nation European Union generates about $18 trillion a year.
The U.S. and Japan on Friday announced an agreement on several long-standing trade issues, paving the way for Japan to join the TPP negotiations, which U.S. officials have said they want to complete by the end of the year.
The governments now in the talks must still formally invite Japan. Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam are also engaged in the talks.
U.S. farm groups say the accord will open Japan to their products, including rice, which has been limited. Japan produced about 7.7 million metric tons of rice last year, according to the U.S. Department of Agriculture, a bit more than the U.S. total of 5.9 million. China produces 140.73 million tons, the USDA said.
“We’ve long understood that rice is uniquely sensitive in Japan,” said Bob Cummings, chief operating officer of the Arlington, Virginia-based USA Rice Federation. “We’re hopeful that at the end of the negotiation, we are going to end up with a significant improvement in the quality and the quantity of our rice access in Japan.”