A proposed international trade treaty involving Pacific nations including Japan could threaten the domestic auto recovery here and in other industrial Midwestern states if it isn’t smartly negotiated, the Big Three U.S. auto companies and Ohio senators Rob Portman and Sherrod Brown said.
The treaty is called the TPP, or Trans-Pacific Partnership, and could involve 12 or more nations in an Asia-Pacific “Free Trade Area” including Australia, Brunei, Canada, Chile, Japan, Mexico, New Zealand, Peru, Singapore, Malaysia and Vietnam. There’s been talk that China could be included.
A sore point for industry is the longstanding resistance by Japan to exports of U.S. autos during decades that have seen dramatic expansions of Japanese auto exports and manufacturing in the U.S. One estimate from the nonprofit Center for Automotive Research said the auto trade deficit with Japan was $42 billion, about 67 percent of the total U.S trade deficit with Japan, in 2011.
U.S. annual trade deficits run about $600 billion, aggravating critics who say it shows the U.S. is playing a losing game by surrendering markets to foreign exporters without getting enough in return to support jobs in the U.S. The manufacturing jobs recovery in Ohio since 2009 - 55,000 jobs - has been largely in the auto industry.
This week, U.S. Trade Representative Michael Froman in Tokyo urged Japan to open its market to American cars and insurance companies, adding that imports make up a tiny fraction of Japan’s market, but nearly half the U.S. market.
“Japan’s entrance in the TPP poses enormous challenges since it is the most closed auto market in the world with a history of unfair treatment against U.S. autos,” Sen. Sherrod Brown said. “More recently, Japan has undervalued its currency to make its exports even cheaper. With one in eight Ohio jobs supported by the auto industry, the stakes couldn’t be higher for our state’s workers, businesses, and economic livelihood.”
Former Missouri Gov. Matt Blunt, now chief lobbyist for Detroit’s Big Three automakers — Chrysler, Ford and General Motors — as president of the American Automotive Policy Council, calls for establishing an auto trade oversight body. He said it doesn’t appear Japan has conceded anything yet of any real substance.
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