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UPDATE 1-US says Japan must meet trade pact's high standards
February 29, 2012 / 11:24 PM / in 6 years

UPDATE 1-US says Japan must meet trade pact's high standards

* Detroit automakers oppose Japan’s entry in talks

* “We have to be very careful,” Michigan lawmaker says

By Doug Palmer

WASHINGTON, Feb 29 (Reuters) - U.S. Trade Representative Ron Kirk sought to assure lawmakers on Wednesday that the United States would not sign off on Japan’s entry into trans-Pacific trade talks until it is confident Tokyo is ready to meet high U.S. goals for the pact.

“We’ve been very honest (in talks with the Japanese) that they have to meet those standards,” Kirk told the House of Representatives Ways and Means Committee at a hearing on the Obama administration’s trade agenda. “Frankly, it’s in Japan’s hand to demonstrate their willingness to address these issues.”

Japan, the world’s third-largest economy, announced its desire last year to join talks with the United States, Australia, Vietnam and six other countries in the Asia Pacific region on the Trans-Pacific Partnership pact, known as TPP.

The United States is pushing for an agreement that removes as many tariff and non-tariff barriers to trade as possible, and tackles new issues like the activities of state-owned enterprises, border procedures that disrupt supply chains and obstacles to free trade in environmentally-friendly goods.

Detroit-based automakers Ford, Chrysler and General Motors oppose Japan’s participation because they believe Tokyo is not prepared to tear down “non-tariff barriers” the companies blame for low U.S. auto sales in Japan.

“We have to be very careful,” said Representative Sander Levin, who comes from Detroit and is the top Democrat on the Ways and Means Committee. “We say we welcome (Japan’s interest), but the question is whether a welcoming will lead to addressing an historically closed market.”

House Ways and Means Committee Chairman Dave Camp, a Republican from Michigan, said he believed Tokyo’s interest represented a “unique opportunity” to address longstanding auto, agricultural and services trade barriers.

But he also pressed Kirk for assurances that “Japan is ready to meet TPP’s high standards.”

Many U.S. farm and business groups have welcomed Japan’s potential participation, but still worry Tokyo may not really be willing to open its market and could drag out the negotiations.

Detroit automakers say the fact that Japanese automakers control more than 95 percent of the Japanese auto market shows the extent of the country’s regulatory or structural barriers that keep out foreign cars.

Japanese official deny the charge, saying U.S. cars do not fit the Japanese market because of their size, high fuel consumptions and higher prices.

A free-trade pact with Japan could require the United States to phase out its remaining low tariffs on Japanese automobiles as well as a 25 percent tariff on pickup trucks. Japan already has a zero percent tariff on U.S. cars.

The nine countries negotiating the TPP are beginning a new round of bargaining in Melbourne in coming days and have a goal of reaching an final agreement by the end of this year.

Kirk gave no timetable for a decision on Japan’s entry or for a decision on Canada and Mexico, which have also applied to join the talks.

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