WASHINGTON – American auto workers have petitioned Congress to oppose the formation of a free trade agreement with Japan.
More than 80,000 employees at Chrysler, General Motors and Ford signed the petition, which argued that the U.S. should not complete the Trans-Pacific Partnership Agreement with Japan unless it includes enforceable measures requiring Tokyo to address its non-tariff trade barriers and currency regime.
“Japan has the most closed automotive market in the world and continues to manipulate its currency to unfairly subsidize Japanese automakers,” Matt Blunt, president of the American Automotive Policy Council, said in a statement Tuesday.
The petition came on the same day that Japan joined U.S.-led talks for what could be one of the largest free trade agreements in the world. Japan’s admission to the negotiations was announced at the latest round of TPP —Trans-Pacific Partnership – talks in Kota Kinabalu, Malaysia.
An ambitious agreement shrouded in secrecy
Described by the Office of the U.S. Trade Representative as “an ambitious, next-generation trade agreement that reflects U.S. economic priorities and values,” the TPP covers 12 Asia-Pacific and North American countries — including Australia, Canada and Malaysia — and will cover more than two-fifths of global trade volume.
“The Obama Administration is seeking to boost U.S. economic growth and support the retention and creation of high-quality American jobs by boosting exports in a region that includes some of the most robust economies in the world,” the USTR said in a statement.
According to experts, the TPP is also the economic pillar of the Obama Administration’s “pivot to Asia,” a foreign policy move that calls for greater American military and diplomatic efforts in the Asia-Pacific region.
One country that has been noticeably absent from TPP talks is China. Although China has the option of joining negotiations, the country is likely to “keep its distance” in the near future, according to Sanchita Basu Das, a lead researcher at the Institute of South East Asian Studies. Basu explained, “The country is not ready for the obligations that come with the agreement.”
Launched in 2005 as the Trans-Pacific Strategic Economic Partnership, the agreement was renamed in 2010 after the U.S. and six other countries joined talks and greatly expanded the scope of the original proposal.
To date, all 18 rounds of negotiations have been shrouded in secrecy and the USTR has disclosed little information about the terms of the proposed agreement.
Negotiations have also been marked by protests claiming the deal would potentially grant unprecedented power to corporations and infringe upon consumer, labor, and environmental interests.
“One-way trade”
The biggest concern U.S. auto workers have is the threat that Japan’s membership in the pact could pose to jobs in the American automobile industry.
In their petition, the auto workers asked Congress to “support me and my job by saying no to Japan’s closed market and currency manipulation.” The petitions were scheduled to begin arriving at Capitol Hill offices on Tuesday.
To protect its domestic manufacturers, the Japanese auto market is surrounded by a set of deeply entrenched non-tariff trade barriers, which include a quota for the number of U.S. auto imports. The quota is currently set at 5,000 units per vehicle class each year.
According to Sen. Debbie Stabenow, Japan’s protectionist policies have allowed the country to sell 120 vehicles in the U.S. for every one American vehicle sold in Japan. The Michigan Democrat has urged colleagues to oppose Japan’s membership in the TPP unless the country addresses what she regards as its protectionist trade policy.
Japan has not signaled if it will be making changes to its trade policies as part of the agreement. On the other hand, the U.S. has been looking at eliminating tariffs on Japanese auto imports, which are the only form of protection for U.S. automakers in the domestic market.
In addition, Japan has been carrying out a set of aggressive expansionary monetary and fiscal policies that have been driving a substantial depreciation of the yen. The weak yen allows Japan to create an artificial competitive advantage for its exports in the international marketplace.
The American Automotive Policy Council’s Matt Blunt emphasized, “To avoid locking in one-way trade and rewarding currency manipulation, the TPP must require Japan to fully open its market to competition and include strong and enforceable currency rules to prevent subsidies for Japanese automakers.”
Interactive Graphic: The U.S. recorded a $154.6 billion trade deficit with the 11 other TPP countries last year. How does this break down by country?