Japan and America Should Honor Promise To Abolish Auto Tariffs

The U.S.-Japan Trade Agreement took effect in January last year. The Japanese government had insisted that U.S. lift tariffs on Japanese automobiles as a condition to signing the agreement. If lifting tariffs was used as an excuse for making an unfair deal, then it cannot be overlooked.

Under the agreement, tariffs imposed by Japan on agricultural products such as beef were lowered to mirror those of the Trans-Pacific Partnership, a trade deal from which the previous Trump administration withdrew. However, when it came to U.S. tariffs on automobiles, there was simply a note in related documents that eliminating the tariffs was “to be negotiated.”

Many politicians including Japanese Prime Minister Abe Shinzo, repeated that the elimination of tariffs was a prerequisite for an agreement. The Diet went on to approve of the trade deal on this basis. The official view was that auto tariffs would be addressed in the second phase of negotiations.

It has now been two years since the agreement was reached, and there has been no indication as to when talks will begin. Instead, last week, the Japanese and U.S. governments established a new framework for economic discussions, effectively freezing negotiations on auto tariffs. According to estimates by Asahi Shimbun, if auto tariffs are not lifted, Japan will have lifted tariffs four times the amount of the U.S. This has to call into question the validity of former Minister for Foreign Affairs Motegi Toshimitsu’s claim that the deal was “a win-win agreement for both Japan and the United States.”

The flaws in this assertion are obvious. The government must make clear that it has a responsibility for repeating claims that stray from the truth of the situation and make its negotiating policy public.

We must also not forget that auto tariffs are not simply a matter of profit and loss between Japan and the United States.

World Trade Organization rules provide that free trade agreements must eliminate 90% of tariffs. Without the elimination of auto tariffs, it is expected that the United States will have eliminated less than 60%. Both Japan and the U.S. have failed to fulfill their duty to report the agreement to the WTO.

Both countries have abandoned their roles as major powers to encourage free trade. They need to make clear that they will conduct a second phase of negotiations in which they discuss eliminating auto tariffs, then report to the WTO, as they are obligated to do.

President Joe Biden’s administration still continues to levy additional tariffs on Japanese steel and aluminum products. This is a misguided policy implemented by the previous administration under the guise of national security and should be promptly revised.

Japan and the U.S. also agreed last week to cooperate in establishing an economic framework in the Indo-Pacific region. This is seen as a move by the Biden administration to create a new structure led by the United States, given deep-rooted opposition to the TPP back home.

While America’s eager participation in the Asia-Pacific region is welcome, the nature of the TPP is changing, with both China and Taiwan recently requesting to enter the trade deal. In light of this, the Japanese government should focus their efforts on doggedly urging the United States to return to the TPP.