Auto parts differences between Japan, U.S. and others seen clouding prospects for next TPP ministerial talks
The 12 countries taking part in Trans-Pacific Partnership free trade
negotiations are likely to face difficulties in arranging a ministerial
meeting as Japan, the United States and others were unable to narrow the
gap over the automotive sector in recent working-level talks.
The participating nations are aiming to hold a ministerial session
later this month or in early October, after they failed to reach a broad
TPP accord at their previous ministerial discussions in Hawaii at the
end of July.
In the latest working-level talks in Washington, which through
Friday, Japan, the U.S., Canada and Mexico discussed rules of origin to
determine how much auto parts produced in the envisioned TPP free trade
region need to be used in finished vehicles for them to enjoy tariff
cuts or elimination.
The local content rules would directly affect employment in auto
parts industries and therefore are a politically important issue,
negotiations said.
“We had constructive discussions, but have yet to reach a consensus.
We will continue working,” Takeo Mori, Japan’s ambassador for economic
diplomacy told reporters after the four-way meeting.
Canada and Mexico, members of the North American Free Trade Agreement
along the United States, strongly oppose setting the local content
ratio for auto parts under the TPP at a level far below the 62.5 percent
set under NAFTA. They are concerned that a very low ratio would lead to
a drop in market shares of Canadian and Mexican auto parts makers in
the U.S., one of the biggest automobile markets in the world.
