In anticipation that Japan may enter into the proposed Trans-Pacific Partnership (TPP) trade deal between the U.S. and ten other countries, a delegation of lawmakers led by Representative Sander Levin (D-MI) and his brother, Senator Carl Levin (D-MI), is urging President Obama to maintain the current tariffs on Japanese vehicles.
Detroit’s Big Three Automakers have expressed concern that the trade partnership will result in lower sales, especially to Japanese automakers including Toyota Motor Corporation.
In a letter to President Obama, the delegation of four dozen Democratic lawmakers said, “In an industry with razor-thin profit margins, the elimination of the 2.5 percent car tariff (as well as the 25 percent truck tariff) would be a major benefit to Japan without any gain for a vital American industry, leading to more Japanese imports, less American production and fewer American jobs.”
In an interview with Reuters news service, Representative Levin said, “What the letter does is sound an alarm about Japan’s participation.” He also expressed skepticism that the proposed partnership would result in a level playing field and allow for the sale of more U.S.-made vehicles in Japan.
In the past, Levin has been a staunch supporter of trade agreements, and was instrumental in persuading the Obama administration to renegotiate the recent trade pact with South Korea in ways that were more favorable to U.S. automakers.
The letter went on to say, “While some have compared this challenge to the one we faced with Korea, the Japanese auto market is more impenetrable, the history of formidable barriers and imbalanced trade is longer, and the magnitude of the problem is far greater than with Korea. Despite being the third-largest auto market in the world, Japan ranks last among OECD (Organization for Economic Cooperation and Development) members in terms of auto market import penetration, at 5.9 percent in 2012.”
According to the lawmakers, unfair taxes and currency manipulation by the Japanese government have created impenetrable barriers to foreign automakers looking to sell their products in Japan.
Some have speculated that the Obama administration and the Japanese government have already come to terms on an agreement that would allow the U.S. to maintain the current tariff on Japanese automobiles in exchange for measures that would allow Japan to protect some agricultural products, including its rice market, from foreign threats.
Rep. Levin said he has no knowledge of such an agreement.