US, Japan Meet to Iron Out Automobile Trade Differences

US and Japanese trade officials met in Washington earlier this week in an effort to resolve some of their outstanding issues related to automobile trade, with just weeks until the next meeting of chief negotiators for the 12-country Trans-Pacific Partnership (TPP) Agreement. 

Differences between Japan and the US – the two biggest economies in the TPP talks – on agricultural and automobile trade have been cited as the largest stumbling blocks for clinching an overall 12-country deal.

The two sides have therefore held a series of bilateral meetings on both topics over the past several months in an effort to reach a mutually acceptable agreement.

Regarding automobiles, Washington is pressing Tokyo to open its market to more imports, mainly through the removal of non-tariff barriers. The two sides had agreed last year that bilateral discussions on the subject – a long-standing sticking point between them – would be held in parallel to the TPP talks, as one of Japan’s conditions for entry into the overall negotiations.

On the agricultural front, Washington had until recently been pushing for total tariff elimination, which Japan has said it cannot agree to given the domestic sensitivities surrounding farm trade.

Following an April summit between US President Barack Obama and Japanese Prime Minister Shinzo Abe, it appeared that Washington would settle for tariff elimination “to the maximum extent possible,” giving Tokyo some room to maintain limited protections for particularly sensitive agricultural goods like beef, sugar, and dairy.

This prospect has rankled the highly influential US farm lobby, which has repeatedly threatened to withhold its support for the deal if tariffs are not eliminated as previously hoped.

American dairy farmers have similarly complained, with members of the National Milk Producers Federation and the US Dairy Export Council saying in a letter to the Office of the US Trade Representative (USTR) and the US Department of Agriculture that it would be “unacceptable” for Japan not to grant full access to this sector.

US trade officials have said that they are working with Japan to achieve the maximum possible access for American farm exports.