Japan and the United States are considering the introduction of safeguard measures that would enable Washington to restrict imports of Japanese cars should they surge under the envisioned Trans-Pacific Partnership free trade pact, negotiation sources said Thursday.
While the United States seeks measures to protect its auto sector amid persistent concern over a possible sharp increase in the number of Japanese car imports, Tokyo and Washington are struggling to reach a compromise on criteria for implementing the safeguard measures, seen as an “emergency” action, the sources added.
The two countries are discussing motor vehicles, insurance and other nontariff measures in bilateral negotiations being held in parallel to TPP talks.
Apart from the safeguard measures, the United States is also urging Japan to open up its auto market by reviewing its automotive safety standards and the taxation system that favors minivehicles. It is also looking at the introduction of measures that would enable Washington to snap back auto tariffs if Tokyo violates TPP agreements.
Tokyo will likely accept some of the U.S. requests on the auto sector to draw concessions from Washington in other areas. It is now considering reviewing the minicar tax system and accepting a tariff snap-back provision.
In return, Japan seeks to retain tariffs on sensitive farm products to protect its agricultural sector, while it will also urge the United States to scrap tariffs on Japanese cars at an early date.
The TPP negotiations also involve 10 other countries. Automotive issues are one of the most contentious topics in Japan-U.S. bilateral negotiations.
As the TPP members strive to reach a basic agreement at a ministerial meeting starting Saturday in Singapore, Japan and the United States also need to conclude their bilateral talks at an early date.
Agreements to be reached on auto issues during the bilateral talks will be reflected in the multilateral TPP negotiations, although bilateral talks do not cover how to deal with tariffs on goods including vehicles and farm products.