Detroit News - U.S. Rep. Gary Peters: Including Japan in Trade Talks Threatens U.S. Autos

Op-Ed

By Rep Gary Peters

The Obama Administration is leading negotiations on a new multi-lateral trade agreement, the Trans-Pacific Partnership (TPP), with a number of Pacific Rim countries including Australia, Chile, Mexico and Vietnam.The TPP presents an opportunity for the United States to gain increased market access to the Asia-Pacific region, but it also presents real risks.Past trade deals such as NAFTA have had a devastating impact on the Michigan economy, especially on our manufacturing sector.

This month, Japan and the U.S. agreed on a deal paving the way for Japan to join TPP talks. Canada became the final TPP member country to approve Japan's entry late last week.

A decision among current TPP member countries allowing Japan's entry could come within weeks.

Allowing Japan's entry to the TPP before they open their auto market would amount to giving the Japanese auto companies a $1 billion annual tax break in the form of tariff elimination. This would be harmful to the U.S. auto industry, Michigan, and our nation's continued economic recovery.

Despite decades of efforts by Japan's trading partners to open the Japanese market to imported autos, Japan remains the most-closed auto market.

Japan eliminated their tariffs on foreign autos in 1970s, yet imports make up less than 6 percent of the Japanese auto market. Non-tariff barriers including currency manipulation and complex safety, noise and pollution standards have effectively kept Japan's market closed for decades.

Japan has done nothing in recent years to suggest it is moving toward a more open market. It recently implemented a program similar to our "Cash for Clunkers" in a discriminatory manner, excluding almost all American autos. Japan is actively manipulating its currency to make its exports more competitive and American goods more expensive in Japan; the Yen has been weakened by over 17 percent just since October 2012. Japanese currency manipulation adds as much as $2,500 to the price of an American vehicle being sold in Japan.

Allowing the Japanese to enter the TPP before they open their market threatens the economic renewal of the entire U.S. manufacturing base, especially in the Midwest. Our nationwide economy prospers when our auto manufacturers, part suppliers and dealers succeed -- this is why the White House took decisive action to help save the industry just four years ago. We can't undo the sacrifice of American workers and taxpayer investments made to save the industry by giving Japan unilaterally expanded access to our market.

This is why I led a letter to President Obama in 2011, urging that Japan not be allowed into TPP negotiations unless it opens its market, and why I will oppose any TPP agreement that reduces or eliminates tariffs on Japanese autos without first truly opening the Japanese market. American workers are the best in the world, and Congress and the White House should be fighting for a level playing field where they can compete and win.

To help make a level playing field a reality, I'm leading the fight to fully fund the Interagency Trade Enforcement Center (ITEC) -- a new trade enforcement unit that significantly enhances our capabilities to aggressively challenge unfair trade practices around the world.

The ITEC plays a critical role in trade enforcement efforts, and has already helped to advance multiple enforcement actions and investigations. I will use every tool at our disposal to combat unfair foreign trade practices and to give American workers and companies the chance to boost exports, compete abroad and create jobs right here in Michigan.

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