Japan joined Trans-Pacific Partnership (TPP) free trade agreement talks late in July, so the US is sending Trade Representative Mike Froman to Japan on August 19 to negotiate ways to open up the country's auto import market in ways that will benefit all member countries, Politico reports. The TPP free trade deal, which involves countries like Singapore, Brunei and Vietnam – but not China – is set to close at the end of 2013.

Japan had been vying to join TPP negotiations since April, to the chagrin of US automakers who already are fed up with non-tariff-related trade barriers (Japan imposes no vehicle tariffs) that restrict exports to the Island Nation. They believe that a free trade agreement with Japan could result in US tariffs being dropped, which will help to boost sales of Japanese vehicles in the US - which are already quite strong - but won't do much to help American vehicles sell in Japan.

The US currently imposes tariffs on Japanese vehicles imported here, at the rate of 2.5 percent for cars and 25 percent for light trucks. Even so, in 2011 the US imported over $40 billion in Japanese autos, but it only exported $1.5 million in American vehicles to the country.

Tariffs aren't the issue for the US, so Froman will be discussing "a number of voluntary measures that have been employed over the years [by Japan] that have had an adverse effect on auto imports, whether it's from the US or Korea or Europe," Froman states, according to The Wall Street Journal.

The US, a TPP partner since 2009, hopes Japan does join the currently 11-strong partnership as a full negotiating participant before the close of the deal... just after the two countries have smoothed over trade issues.


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  • 108 Comments
      Jobu
      • 1 Year Ago
      So does this make it attempt number 8,532? Good luck with that, dude...
      Pllc15
      • 1 Year Ago
      This issue has been on the table since the 70's. U.S. The big three have equity stakes in Mazda, Mitsubishi and Toyota but they haven't helped them over the years. The U.S. missed out in acquiring Nissan when it was about tank. It was taken over by Rennault. One non-tariff trade barrier but not unsurmountable is Japan requires tail lights come in three different colors, amber, red and white. U.S. made cars come in one color, red. You can generally tell which Japanese car was made in the U.S. by this observation. Also left-hand steering is a detriment to all foreign manufacturers, except for the UK, especially when you enter toll roads when you have to get out of the car and deposit money on the right side of the car. The other non-tariff barrier in Japan is one of image. In general, Cadillacs are considered cars owned by the Yakuza and therefore are not popular there.
      The Other Bob
      • 1 Year Ago
      The only way to get them to open their doors is to fight fire with fire, but our trade reps aren\'t willing to do that. Shut the door on Japanese products would - god forbid - cause Japan to buy less agriculture or some other low-wage product. Everyone is afraid to be called a protectionist when all we want is the same opportunity in Japan as we get in Europe.
        Antonio
        • 1 Year Ago
        @The Other Bob
        What do YOU not understand. The USA imposes 25% import tariffs on imported trucks and 2.5% on cars. Japan has ZERO tariffs.
      • 1 Year Ago
      [blocked]
        rrusrjr2
        • 1 Year Ago
        Tax them more? The Japanese and other foreign transplants have created more automotive jobs in the US than any of the former Big Three over the last 15 years. Only a fool, aka Obama, would dare jeopardize those jobs by penalizing foreign made imports from those same transplant companies. Then again, it is Obama, and he has had the facility to lie from both sides of any issue. Example-'automotive business saved by the bailout'. Check GM remaining debt to the US taxpayers, never to be repaid, at around $27.5 billion. BO said he saved jobs, while looking the other way as GM put up plants in China. Now BO has openly stated he wants the Feds out of the auto business, and is looking for a suitor. Suitor will likely speak Mandarin. How's that fit ya, UAW?
        the.fog
        • 1 Year Ago
        Agreed
          S h a w n
          • 1 Year Ago
          @the.fog
          Ok, let's tax all the Chevrolet and Fords coming from Mexico and Canada, the Buicks coming from Korea, and all Chrysler products now that they are foreign owned.
      Temple
      • 1 Year Ago
      Detroit needs to first make cars that Japan wants. Top selling cars in Japan are keis (minicars) and hybrid A/B-segment cars. This is a market where the Civic was discontinued for being 'too big'. Gas prices is also much more expensive. If Detroit wants to sell cars in Japan it needs to make a small hybrids (like the Prius-C). Most minicars (keis) sell for around $10-12k and are dirt cheap, and it probably isn't worth the effort to build cars wit such low profit margin.
      richard
      • 1 Year Ago
      The USA should put a 50% tariff on any imported Japanese vehicle. Until we do that, Japan will just continue to laugh at our stupidity.
        Slizzo
        • 1 Year Ago
        @richard
        Doesn't stop them from building their most popular models here, which they already do.
          rlog100
          • 1 Year Ago
          @Slizzo
          They assemble some of them here and many of them to avoid that 25% tarriff.
          clquake
          • 1 Year Ago
          @Slizzo
          rlog, I guess you don't understand "North American Content"
        the.fog
        • 1 Year Ago
        @richard
        True that.
        clquake
        • 1 Year Ago
        @richard
        Doing such a thing would cripple the US economy, and would give the big three even more incentive to create junk, just look at the "awesome" late 70's & 80's products.
      Bill
      • 1 Year Ago
      There are many ways a government can prevent foreign automakers successfully compete with domestics without tariffs. I'm not sure if it still goes on now... but an economics professor in 1999 said that Japan made it difficult for foreign auto manufacturers to repair foreign cars. So even if a Fusion was the same price as a Camry in Japan... a Japanese would buy the Camry just for the easier repair service. But then again, at least over 100K German cars are sold in Japan in a year (not much but better than roughly 50 US-made cars at $30,000 each for $1.5 million. Maybe they ship GM and Ford cars from Europe?). So it is possible to sell foreign cars in Japan, they just need to ones that are sufficiently different than Japanese cars / luxurious / fast / good image.
        Famsert
        • 1 Year Ago
        @Bill
        You said it right there didn't you? To compete in Japan you need to offer superior cars. Americans can't do small cars better than the Japanese. Americans can do pickups and muscle cars both of which are niches in Japan.
        kazkoda
        • 1 Year Ago
        @Bill
        And built better.
      • 1 Year Ago
      [blocked]
      GR
      • 1 Year Ago
      Want to sell in Japan? Build for Japan. You can't merely try to sell the same thing as here over there. For Japanese companies, the cars sold in Japan differ from the line up sold here because they take into account the differences in automotive needs. If you have never been to Japan, then it may be hard to imagine why American cars don't sell well there. Once you go, you will quickly realize that most drive cars that would be considered ultra compacts and therefore the best selling segment are kei-cars which have 660cc max displacement. Now tell me of a company that is not Japanese that builds cars within kei-car specs. Not even the Smart ForTwo qualifies with the motor it has in the American market. Simply, no one else makes a more suitable car for the masses of Japan. This is also why brands like Suzuki and Daihatsu, which failed in the US, strive in Japan. Both are actually very profitable. Both are makers who focus on small cars, especially kei-cars. To prove my point, Suzuki outsold Nissan in 2012. That is something UNTHINKABLE in the US market, but a common reality in Japan because of the huge difference in car segments between the US and Japan. Due to the high cost of ownership, high fuel prices, car category taxes, stringent vehicle inspections, tiny yet expensive parking spaces, etc. many Japanese have resorted to buying very small cars like kei-cars. Until recently, the gov't was offering a tax rebate on hybrids which spurred hybrid sales. This has ended and consequently, hybrid sales have cooled down a bit in favor to kei-car sales. Now compare with what the Big 3 offer. They don't make kei-cars nor do they make hybrids that best Japanese models in fuel economy. There is little reason why a Japanese person should buy an American car given American cars weren't designed for Japan's unique driving, parking, and cost conditions. The people who drive American cars in Japan are the people who are American car enthusiasts and went out of their way to obtain and incur the added cost of owning one. They are like cult cars or status cars. American cars are not shunned or disrespected in Japan. They just don't suit the needs of most people in Japan therefore fail to sell well. It's a big difference from the Japanese makers who purposefully design cars for their foreign markets. Not even the Honda Civic is sold in Japan anymore due to low sales. However, Honda continues to develop and produce the car for foreign markets like the US. This is how and why there is such a difference between import sales in the different nations. The Japanese carefully craft their cars for the intended market. Americans can seem to care less about to whom and where it is sold. The end result in sales figures is not at all surprising.
        MAX
        • 1 Year Ago
        @GR
        Korea makes similar cars as the Japanese and they had to withdraw because of Japanese racism.
          Jobu
          • 1 Year Ago
          @MAX
          Pride in one's country does not equal racism. It's nationalism, but not racism. Even though they are relatively homogeneous societies, let's not just throw that ugly word at an entire country, OK?
          bK
          • 1 Year Ago
          @MAX
          Koreans actually make and drives the same cars that are sold in the US. Now, I dont see much American cars in Korea when their cars are well suited for the Korean market. Touche?
        • 1 Year Ago
        @GR
        [blocked]
      bK
      • 1 Year Ago
      People have to realize its the size of the cars that is preventing Japanese market to even consider American. Some roads are very very narrow, and there isn't much place on the road to go over 60 mph. Also the engine displacement and size directly affects how much tax and insurance you pay, and I heard it gets really expensive, another reason not to buy huge cars and stay with 660cc Kei cars. Even the honda civic was discontinued in Japan because its too big...
        MAX
        • 1 Year Ago
        @bK
        Is an American built Sonic too large or the Mexican built Fiesta too large? How about the C-max or the Cadillac ATS? Americans are the only ones dumb enough to go for this psuedo free trade BS
          GR
          • 1 Year Ago
          @MAX
          Max, I take it you have never been to Japan. I have. In fact, I go every year. Let me tell you, it's nothing like the US for driving. A Sonic and Fiesta are small cars, but don't meet the specification standards to qualify them as kei-cars. They are not even that small compared to a kei-car. Cars like the Sonic and Fiesta are for cities in non-Japanese countries (given the Sonic originates from South Korea and the Fiesta was designed in Europe). They are far better suited in the US than in Japan. The C-Max and the ATS are definitely large cars for Japan. They would be considered "full size". As I have written before and so did bK, even the Honda Civic was discontinued in Japan due to low sales. The Fit and Honda's kei's like the N-One outsold the Civic to oblivion in the JDM.
          clquake
          • 1 Year Ago
          @MAX
          American makers don't really know how to build a well made small car. They do try, but so far, look at the sales in the countries with really tight spaces, not many Chevy, Ford, or Chrysler cars.
          kazkoda
          • 1 Year Ago
          @MAX
          How about the vehicles you mention are still too expensive and not as well built as the Japanese cars. Unlike American buyers who try to by Americans even though 90 to 99% or the Americans vehicle is foreign made and not well engineered for more money if you are buying a well built product then it is worth you money if not but the best constructed for the price you can afford.
          Famsert
          • 1 Year Ago
          @MAX
          Considering all those cars are still too big and not to mention they do NOT fit Japanese tastes (they seem to like boxes).. then yes the Japanese would not buy them. Why on earth would they buy inferior cars that don't match their tastes? It makes no sense for American companies to invest in Japan either since their tastes are so unique and since the Japanese companies do small cars so well in the first place.
      MAX
      • 1 Year Ago
      Hyundai withdrew from Japan, that's how tough it is
        Hajime1990 #follow
        • 1 Year Ago
        @MAX
        Actually relationship between Japan and Korea were, and still is, quite so bad. Hyundai had very little chance of success in Japanese market, and did fail as everyone expected.
          GR
          • 1 Year Ago
          @Hajime1990 #follow
          Yes, there is tension, but it's Korea doing more of the hating (understandably). Koreans boycott Japanese products due to issues with idiotic right-wing Japanese politicians offending them. The Japanese don't buy Korean cars because they simply cannot come up with a reason why they should over a Japanese car. I can't either, especially if I lived in Japan. However, Korean dramas were quite popular in Japan in case you believe the Japanese are just being racist and hating on Koreans. Some Japanese even visit Korea solely for the Korean celebrity scene. It's kind of like foreign anime freaks and otakus visiting Japan in pilgrimage. You can't hate on a people and culture and then go in droves to their country to swoon over them.
        GR
        • 1 Year Ago
        @MAX
        Hyundai also doesn't build a better car for Japan than Japan does. Go figure.
        Antonio
        • 1 Year Ago
        @MAX
        Bill, Whay Hyundai would YOU buy over a Japanese equivalent. And WHY?
          MAX
          • 1 Year Ago
          @Antonio
          Price sells cars
        rrusrjr2
        • 1 Year Ago
        @MAX
        Japanese cultural resistance to anything Korean causes more of the rejection in Japan than inferiority of product. I know this first hand, having been technical and business liaison between the two countries' in the manufacture of auto parts. The Koreans will remain rejected Asians to the Japanese no matter the products or technologies.
      Hajime1990 #follow
      • 1 Year Ago
      Bout time US should realize that so called "medium" sized vehicles in US are considered "excessively large" in Japan. So you think Prius is for midgets? In Japan they belong to the same segment as Mercedes S class (the so called "3-Number segment")
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