Tags: Barack Obama | Barack Obama | Trans-Pacific Partnership | Japan | US cars

Critics: Obama's Car Claims in Trade Deal Don't Add Up

Image: Critics: Obama's Car Claims in Trade Deal Don't Add Up
(Jonathan Ernst/Reuters/Landov)

By    |   Thursday, 07 May 2015 01:00 PM

One of President Obama's top arguments in favor of the proposed Trans-Pacific Partnership (TPP) is that it will be a huge boon for the U.S. automotive industry, removing trade barriers and  resulting in more Ford and Chevrolet vehicles cruising the streets of Japanese cities.

But U.S. auto industry experts say that these barriers are hardly the sole impediment to increased U.S. car sales in Japan. Much of the problem, in fact, stems from Japanese consumer preferences: In general, Japanese customers buy smaller, fuel-efficient vehicles, which have not always been a strong suit for U.S. automakers.

Also, the Obama administration "is careful not to accuse Japan of imposing tariffs on U.S. cars shipped to Japan," CNN reported. "That's because there aren't any."

Administration officials say, however, that TPP will address other obstacles known as "non-tariff barriers" — arbitrary standards imposed on U.S. vehicles which effectively keep them out of the Japanese market.

But Ford, GM and Chrysler — all cited by Obama as prospective beneficiaries of TPP — "have deep misgivings about the trade deal," according to CNN.

One concern is that it fails to address Japan's ability to use currency manipulation to artificially increase the cost of American cars.

In a recent letter to U.S. Trade Representative Michael Froman, Democratic Sens. Sherrod Brown of Ohio and Debbie Stabenow of Michigan argued that the trade deal could actually damage the U.S. auto industry.

"If not negotiated properly, TPP will have substantial consequences for the American auto and auto parts industry," the senators wrote.

Within the Obama administration, however, officials say U.S. negotiators are actually working to resolve such concerns with their Japanese counterparts in separate talks. They say an agreement based on those negotiations would be "folded" into TPP.

One official said that while the TPP will, in Obama's words, "level the playing field," U.S. automakers need to capitalize on the deal by selling cars that Japanese consumers want to buy.

"We're putting a premium on these non-tariff measures," said one senior trade official. "We're getting rid of them, addressing them. Then it's up to the companies to take advantage of the agreement."

The administration also continues to draw fire from TPP critics like Sen. Jeff Sessions, who contends that the measure is setting the stage for Congress to relinquish its oversight responsibilities to the executive branch.

The Alabama Republican says that under "fast-track" procedures backed by Obama and many GOP lawmakers, the president would be able to classify or redact portions of the deals submitted to Congress.

Sessions contends that the effect of such trade promotion authority (TPA) would be to make it difficult for lawmakers to seek legislative redress in the event that they have concerns about the deal, the Daily Caller reported.

Moreover, "if Congress does not affirmatively refuse to reauthorize TPA at the end of the defined authorization (2018), the authority is automatically renewed for an additional three years so long as the president requests the extension," Sessions said.

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One of President Obama's top arguments in favor of the proposed Trans-Pacific Partnership is that it will be a huge boon for the U.S. automotive industry, removing trade barriers and resulting in more Ford and Chevrolet vehicles cruising the streets of Japanese cities.
Barack Obama, Trans-Pacific Partnership, Japan, US cars
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2015-00-07
Thursday, 07 May 2015 01:00 PM
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