Ford is crying foul over Japan's desire to join a proposed free trade agreement among Asia-Pacific countries. The Trans-Pacific Partnership aims to reduce regulatory hurdles among its participants, but Steve Beigun, Ford vice president for international government affairs, claims the Japanese auto market is "the most protected automotive market in the developed world," and that the industry is unnecessarily dependent on exports to survive. Beigun's solution? Force the Japanese auto industry to restructure before allowing Japan in on the TPP. In industry speak, that means closing down factories.
That's an odd claim given that Japan can't possibly have a lower tariff on imported cars: zero percent. For comparison's sake, importers looking to bring vehicles into the U.S. face a 2.5 percent tariff. But Beigun says Japan uses non-tariff barriers and currency manipulation to discourage imports. Beigun declined to elaborate on what those "non-tariff barriers" are. William Duncan, the director of the Japanese Automobile Manufacturers Association, has been quoted as saying Beigun's assertions are "rather bizarre."
If Japan is guilty of currency manipulation, it's doing a poor job. The yen is currently at a near all-time high against the U.S. dollar, and Japanese manufacturers have steadily worked to move production out of their home country over the past two decades. All told, 70 percent of the machines Japanese automakers sell in the U.S. are built on American soil. So, why is Ford up in arms over Japan? It could be the manufacturer wants to put the country, and its manufacturers at a disadvantage in the markets covered by the TPP.