Washington — The Japanese government on Friday asked to join trade talks aimed at creating a massive free trade zone of at least 11 nations including the United States, Canada and Mexico — a move that could have dramatic implications for the U.S. auto industry.
"Emerging countries in Asia are shifting to an open economy one after another. If Japan alone remains an inward-looking economy, there would be no chance for growth," Japanese Prime Minister Shinzo Abe told a news conference in Tokyo, according to media reports in Japan, where he announced the request to join the Trans-Pacific Partnership talks. "This is our last chance. If we miss this opportunity, Japan will be left behind."
The American Automotive Policy Council, which represents Detroit's Big Three automakers, and some Michigan members of Congress urged the Obama administration not to let Japan join the talks.
"Because Japan is the most closed auto market among developed nations and helps accomplish that through non-tariff measures, including manipulating its currency, Japan cannot be treated like other U.S. trade partners. By artificially weakening its currency, Japan enjoys a huge unfair advantage for their exports while impairing U.S. exports to Japan. That translates into lost jobs for American workers," said AAPC President Matt Blunt, a former Republican governor of Missouri.
"We're for free trade, but only if all trade partners abide by agreed rules," Blunt said. "Japan's weakening of the yen by 23 percent since last October 1, 2012, has consequences beyond the U.S. economy. This is why Japan's actions have been widely criticized by independent groups and world leaders internationally, and threaten to spark a currency war. This is why allowing Japan to join the TPP at this time risks unraveling the entire negotiations and will certainly delay its completion."
But Japanese automakers — who have threatened to move production out of Japan because of the yen — praised the announcement.
"JAMA believes that the establishment of high level economic partnership would, among other benefits, promote free trade and provide common rules across a variety of sectors such as investment, trade facilitation and intellectual property rights which generally advance business opportunities in the region," said JAMA chairman Akio Toyoda, who is president of Toyota Motor Corp.
"We look forward to sustained and vigorous efforts on the part of the Japanese government towards an early realization of an agreement which can truly benefit the automobile industry,"Toyoda added.
The Obama administration said it welcomed Japan's announcement, but said more work was necessary.
"Since early last year, the United States has been engaged with Japan in bilateral TPP consultations on issues of concern with respect to the automotive and insurance sectors," said Acting U.S. Trade Representative Demetrios Marantis.
On Friday, Sen. Debbie Stabenow, D-Lansing and Rep. Dan Kildee, D-Flint, said the Obama administration should keep Japan out of the talks.
"Until Japan gets serious about ending their unfair trade practices, they should not be offered a seat at the negotiating table," Kildee said.
But Sen. Bob Corker, R-Tenn., praised the announcement, saying it is "a positive step toward establishment of an agreement that holds tremendous potential for job and economic growth in the United States"