Levin Outlines Plan To Address Japanese Industry and Currency
House Ways and Means Committee Ranking Member Sander Levin, D-Mich., released on July 23 an action plan (here) designed to benefit U.S. industry in ongoing Trans-Pacific Partnership negotiations with Japan. The congressman outlined three primary steps to achieve that goal. The plan aims to tie U.S. automobile tariff reduction to the success of imports into Japan. That would incentivize Japanese auto market liberalization through TPP. According to the plan, this specific phase-out period should be the “longest” TPP phase-out period. Levin also appeared at the Peterson Institute for International Economics July 23 to deliver prepared remarks and participate in a question and answer session (here).
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“But there is no certainty as to what that period will be. Moreover, if history is any guide, there is no guarantee that Japan will open its market before the end of that period,” the plan warns, adding that reluctance to liberalize its auto market should result in less reduction of U.S. tariffs. The plan said Japanese liberalization should be evaluated through the country’s import penetration rate, a figure that reflects imports from all countries across the globe into a given market .
Secondly, the congressman said Japanese currency manipulation persists. “Currency manipulation not only makes it more difficult to enter the Japanese market, it also gives Japanese producers an unfair competitive advantage in the U.S. market and in third-country markets, making it even more difficult for the United States to reach its objective of doubling exports over five years,” the plan read. He said all TPP countries must agree to avoid manipulation, partake in consultations when manipulation arises, and coordinate action against non-TPP members that manipulate currencies and maintain transparency.
Japan must also consent to eliminate all non-tariff trade barriers, the congressman advised in his final recommendation. The plan identifies U.S. enforcement responses to continued non-tariff trade barrier practice.