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.