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U.S. Announcement on Japan and TPP


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Ways and Means Committee Ranking Member Sander Levin (D-MI) made the following statement today regarding the Obama administration's announcement concerning Japan's possible entry into the Trans-Pacific Partnership negotiations:

"U.S. auto companies are a bulwark of the American economy and manufacturing sector and they can compete anywhere in the world when the playing field is level. But the facts are clear that Japan's market is closed, evidenced by the fact that imports account for just 6 percent of total sales in Japan, compared with nearly half of total sales in the United States and other major auto markets. For decades Japan has had and been using to their economic advantage the most closed auto market in the world, as spelled out in my attached letter to the Administration. As a result, the onus should be on Japan to open their market before receiving any benefit through a trade agreement with the United States.

"The package announced by the Administration after consultation with Japan does not provide an adequate basis for Japan's entry into the Trans-Pacific Partnership.

"First, the unilateral low volume increase of 3000 cars is a meaningless gesture by the Japanese given all of the other obstacles to U.S. exports in their market. Indeed, the impenetrability from those obstacles is reflected in the fact that U.S. automakers have not even been fully utilizing the existing quota.

"Second, a specific reduction of the U.S. auto and truck tariff should be tied specifically to the market opening performance of Japan in the automotive sector, not to the negotiating decisions of other countries for other product lines. This structure has the disturbing potential of pitting sectors directly against one another.

"Third, the absence of any mention of currency is highly problematical. Japan has used currency intervention to give Japanese auto companies one of their most significant unfair competitive advantages, adding tens of billions of dollars to their operating profits for every one-yen drop against the dollar.

"I intend to pursue these issues as well as the items described for parallel negotiations in the 90-days during which the Administration will consult with Congress before beginning negotiations with Japan in the TPP."

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