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Big Labor: Allowing Japan into trade pact could undermine auto bailout

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Politics,Beltway Confidential,Sean Higgins

Last week, the U.S. announced that it had made a deal to allow Japan into talks for the Trans-Pacific Partnership, a major trade pact to lower tariffs on Pacific rim countries. The deal could encompass as much as  40 percent of global trade.

Bloomberg Businessweek reported:

The Japan-U.S. agreement includes measures to lower trade barriers in the automotive and insurance sectors, as well as non-tariff issues, according to a fact sheet from the U.S. Trade Representative’s office today.

“Japan’s entry into this important initiative for the Asia-Pacific region will help it to deliver significant economic benefits to the United States, Japan and the Asia-Pacific region,” acting U.S. Trade Representative Demetrios Marantis said today in a statement welcoming the two-nation agreement.

The deal includes the U.S. gradually scrapping its auto tariffs over an as-yet-unspecified period. At the same time, Japan would negotiate cutting back “a number of regulatory and non-tariff barriers believed to keep U.S. autos out of the Japanese market.”

This has top labor leaders concerned. In a statement, AFL-CIO President Richard Trumka went so far as to say allowing Japan in could undo the White House’s auto industry bailout:

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. (Emphasis added.)

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.

Congressional Democrats and other labor leaders have expressed similar concerns.

The White House is bullish on the deal though, with Tom Donilon, a national security adviser to the president, touting the deal in the Wall Street Journal on Monday:

We always envisioned the TPP as a growing platform for regional economic integration, open to additional countries willing and able to meet its high standards. Under President Obama, the original seven TPP nations have grown to include Vietnam, Malaysia, Canada and Mexico. The TPP was already as ambitious as any trade negotiation in the world. Now we have completed bilateral work with Japan. This is an important step toward Japan joining TPP negotiations. A TPP that includes Japan, the world’s third-largest economy, would represent an annual trading relationship of $1.7 trillion and a strong regional constituency for shared economic values.

 

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