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We are concerned by today’s announcement that the Obama Administration has concluded consultations to allow Japan to join the TPP negotiations. This risks undermining good jobs for America’s working families, especially in the auto and auto parts sectors. The President’s auto sector rescue package was a resounding success. It saved hundreds of thousands of jobs, and U.S. auto companies have been reporting large and sustained profits, bringing work back to the United States from overseas, including from Japan, and hiring additional workers. But today’s announcement could undermine that success.
We appreciate that the U.S. government worked to secure important commitments for America’s workers, communities, and businesses. Unfortunately, our past experience over 30 years of unsuccessful U.S. efforts to pry open Japanese markets gives us little faith that these commitments will be completely implemented or effectively enforced. Japan has a long history of closed markets, currency manipulation, and non-transparent market barriers. We are skeptical that those measures, which unfairly disadvantage U.S.-produced exports and the workers who make them, will be changed thoroughly and quickly enough to provide real benefits.
Although Japan is a high-wage nation with a largely unionized workforce, U.S. workers face massive potential job losses if Japan’s exports to the U.S. increase but its markets do not open as promised. Japan is the second largest contributor to our international trade deficit (after China), and its closed markets have proven immune to multiple efforts to achieve balanced trade. In 2012, the U.S. merchandise trade deficit with Japan surpassed $76 billion, much of it due to lopsided trade in automotive products: Japan maintains the most closed auto market in the developed world, with imports capturing less than 6% of total sales.
Moreover, a number of critical issues were excluded from the reported deal, including concrete commitments on auto parts and respect for labor rights. Japanese automakers manufacturing in the United States have persistently denied their workers a fair and democratic opportunity to decide on union representation. We believe securing additional commitments in these areas is essential.
Finally, the administration must understand and act upon the reality that any tariff and non-tariff achievements made on paper in the TPP can be wiped out overnight through currency devaluation, which makes U.S. exports artificially more expensive, and encourages firms to shift production overseas. U.S. trade agreements (outside the WTO) have never addressed currency manipulation—a pattern that must change.
We urge the Administration to address these concerns in ongoing negotiations with Japan, so that the working people of both countries can share in the gains from increased trade. It is also essential that our government aggressively enforce all commitments. The U.S. manufacturing base—and the millions of good jobs it provides—is at stake.
Contact: Amaya Tune (202) 637-5018