U.S. and Japan Continue Talks on Auto Tariffs

21 April 2014 Dashboard Insights Blog

Once again, the United States and Japan failed to reach an agreement on auto tariffs. Tariffs on automobiles are one of the remaining key issues that lie between the two countries in relation to the proposed Trans-Pacific Partnership (TPP).

On April 9th and 10th, U.S. Trade Representative Michael Froman and Japanese Economic and Fiscal Policy Minister Akira Amari met in Tokyo to discuss the TPP deal. Apparently, they had intensive negotiations that extended to nearly 18 hours in just two days. After the meetings, both told reporters that, despite progress, considerable differences still remain.

The two key sticking points are autos and agriculture. Japan wants to eliminate tariffs on automobiles, while the U.S. wants to eliminate or at least substantially reduce tariffs on rice, beef, and pork. The U.S. currently has 2.5 percent tariff on passenger cars and 25 percent tariff on light trucks. Unidentified sources reported that, during the Froman-Amari meeting, the U.S. proposed to eliminate its auto tariffs over a 30-year span but that Japan rejected the proposal.

Reaching an agreement on auto issues isn’t easy, but talks will continue. Both sides hope to reach a basic agreement on the outstanding issues before President Obama visits Tokyo to meet with Japanese Prime Minister Shinzo Abe on April 24th. The Obama-Abe meeting will likely be a milestone for the U.S.-Japan bilateral trade talks – and furthermore, the success of the entire TPP.

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