A top US trade official says that Japan still has a long way to go before calling itself an open market. While Trade Representative Michael Froman is hopeful that the country’s entry into the Trans-Pacific Partnership free trade talks is one step to pushing down those barriers, he said that they are still wary of the “historical difficulties” the two countries have had in their trade relationship.
The US has accused the Japanese market of certain restrictive practices that has made the country close its doors to imports. These practices are either tolerated and even encouraged by the Japanese government. But at the same time, Japan has strongly relied on exports to give life to its stagnant economy, as domestic spending reached record lows. The auto market in particular is one sensitive issue to the bilateral economic relations of the US and Japan. Forman said that foreign penetration of the Japanese auto market is only at a measly 6%, one sign that the market is still not very open. “I think we all bear the scars of trying to open Japan’s market in the past,” Froman mentioned during a press briefing, ahead of his trip to Japan to discuss certain trade issues.
The next round of TPP talks is scheduled on August 28-30 in Brunei. Froman believes that even with the added complication of Japan’s late entry into the negotiations, they will still be able to finish free trade negotiations on certain issues by the end of the year. But some in the US Congress are pressuring the Obama administration to demand that Japan remove all existing non-tariff barriers like discriminatory taxes, complicated vehicle certification procedures for imports and complex safety and pollution standards that are keeping American auto brands out of the Japanese market.
[ via AP ]