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U.S. proposes minimum import target for autos under TPP

Kyodo

The United States is calling on Japan to set a minimum level for U.S. automobile imports in bilateral trade talks related to the Trans-Pacific Partnership initiative, sources close to the matter said Monday.

Washington wants to introduce a system that would allow it to extend an already proposed period of 30 years for scrapping its auto tariffs if Japanese imports of U.S. autos fall below a set target, the sources said.

The latest U.S. proposal comes as Japan insists on leaving tariffs in place on five “sacred” farm product categories it views as off-limits to the TPP free trade pact — rice, wheat, beef and pork, dairy products and sugar.

Tokyo has rejected the U.S. auto proposal, they said.

Washington wants to retain tariffs on Japanese vehicles — 2.5 percent on cars and 25 percent on trucks — to protect the auto industry, which is politically strong, while Tokyo is reluctant to open up its sensitive agricultural market amid strong concerns among farmers, who fear they will be flooded by cheap imports.

The bickering between the biggest economies in the TPP framework is hampering the broader 12-country negotiations for sealing the pact. Tokyo and Washington will resume working-level talks Tuesday to break the stalemate before the summit between Prime Minister Shinzo Abe and U.S. President Barack Obama on Thursday, but the outlook is murky because huge differences remain, the sources said.

According to the Japan Automobile Importers Association, Japan imported 13,142 vehicles from the United States in 2013.

One of the sources argued that Washington’s proposal to set a minimum level for auto imports is effectively aimed at retaining its auto tariffs by getting Tokyo to set an unrealistic import target.