By Gabe Nelson, Crain News Service
WASHINGTON (Oct. 21, 2013) — With the White House seeking to finalize a trade treaty deal by year-end, Japanese auto makers and the Detroit 3 are embroiled in a good old-fashioned trade war.
President Barack Obama has thrown his weight behind negotiations on the Trans-Pacific Partnership, an attempt to create a 12-country free-trade zone around the Pacific Rim. Such a deal likely would start the clock on a slow phase-out of U.S. tariffs on imported cars, a vestige of the days when Hondas, Toyotas and Nissans rolled off freighters rather than U.S. assembly lines.
Japanese manufacturers see a trade agreement as a chance to get rid of the "chicken tax," a 25 percent U.S. tariff that makes it uneconomical to import pickup trucks from Japan. But U.S. auto makers are resisting, arguing that Japan should not be rewarded when its car market is virtually closed to U.S. imports.
As the negotiations head into their final rounds, both sides are making their final pitches.
Last month, spurred by auto makers such as Ford Motor Co., 60 U.S. senators signed a letter that called on the White House to take a hard line on currency manipulation in trade deals—a veiled jab at Japan, which has taken anti-inflationary measures that have weakened the yen and helped its exporters.
"You will never find American politicians talking about changing the value of the dollar to spur exports," said Matt Blunt, the former Missouri governor who as head of the American Automotive Policy Council is leading the charge in Washington on behalf of the Detroit 3. "It happens all the time in Japan."