Japan’s Alternative To Trump’s US Withdrawal From TPP: Bilateral Trade Negotiations Centered On Car Trade And Manufacturing

Jan 26, 2017 05:30 AM EST | jonathan aguilar

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When President Donald Trump announced the formal withdrawal of the United States from the Trans-Pacific Partnership (TPP) trade pact, he specifically mentioned Japan's failure to purchase enough U.S. cars. To preserve Japan's trade ties with the United States, Japanese leaders must find a way to convince Japanese buyers to buy U.S. made cars.

As cited in Auto News, Japan needs to maintain healthy ties with the United States, its main security ally that protects it from regional threats from neighbors like China and North Korea. Japan's military defenses have not been developed because of the non-nuclear policy and arms limitations imposed by their own constitution.

There is a report that a bilateral deal with the U.S. is favored by some members of Prime Minister Shinzo Abe's office but appointing someone to lead such negotiations should be done only after the Prime Minister meets with President Trump. The Prime Minister also does not support the idea of a TPP without the U.S. being pushed by Australia.

If bilateral trade negotiations between the U.S. and Japan push through, the main consideration will be car manufacturing and trade. Trump has specifically said that Japan is doing "things to us that make it impossible to sell cars in Japan, and yet, they sell cars to us and they come in like by the hundreds of thousands on the biggest ships I've ever seen."

The Trade Minister of Japan, Hiroshige Seko responded to Trump's in a statement. "The fact is that Japan does not apply tariffs to U.S. cars at all and regarding non-tariff areas, we do not discriminate against them at all in comparison with Japanese cars," he said.

In 2015, Japan exported 1.6 million cars to the U.S. while the U.S. sold a mere 19,000 vehicles to Japan.  However, the Japan Automobile Manufacturers' Association reports that 418,000 vehicles were exported by Japanese automobile plants in the U.S. to other countries. Such a disparity in trade indicates that it will take superhuman efforts to convince Japanese buyers to purchase U.S. cars. 

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