USTR Says Japan FTA Will Be Better Than TPP

The U.S. will be seeking a quite different agreement with Japan than what was garnered through the Trans-Pacific Partnership, U.S. Trade Representative Robert Lighthizer said on a call with reporters Sept. 26. Lighthizer, who called TPP "a very weak agreement," said he didn't want to go into a litany of all of TPP's problems, but he mentioned rules of origin. Democrats criticized the TPP because it only required 45 percent of a car's content to be made in the region (see 1601120051), and given that Mexico and Canada were signatories to the agreement, that could have been a back door way to get cars into the U.S. duty free from its neighbors that had more Chinese or European content than North American content.

Lighthizer said getting Trade Promotion Authority will take more than 90 days, but there are items that would not require statutory changes, and talks on those can begin promptly. "There are a number of things, particularly the goods area -- tariffs and other obstacles to trade -- that we hope to tackle fairly quickly in the next few months," he said.

The U.S. Chamber of Commerce said this will be an opportunity to "address longstanding issues between our two nations," and said that Japan is one of America's most important export markets. However, Japan said in the joint statement announcing the talks that it will only open up its agriculture and fishery markets to the same extent it promised to TPP partners. Most importantly for Japan, by opening talks, it's granted a reprieve from Section 232 auto tariffs during negotiations. According to the New York Times, SMBC Nikko Securities estimated that Japan's car exports could decline by 200,000 units if a 20 percent tariff on car imports were to be passed on to buyers.