TPP Should Include NAFTA Auto Rules, Long Phase-outs, Say Senators
The U.S. must stay firm in its commitment to phase-out U.S. car and truck tariffs in the Trans-Pacific Partnership “in accordance with the longest staging period in the agreement,” said three senators from auto manufacturing states in a letter to U.S. Trade Representative Michael Froman on Sept. 9 (here). Those phase-outs must also “be back-loaded to the maximum extent,” said the lawmakers, referring to more significant tariff drops at the end of the phase-out periods.
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TPP auto rules of origin should also reflect the 62.5 percent regional value content threshold in NAFTA, said Sens. Sherrod Brown, D-Ohio, Rob Portman, R-Ohio, and Debbie Stabenow, D-Mich. That echoes a call by AFL-CIO President Richard Trumka in recent weeks, who criticized reports of a TPP deal struck with Japan on far lower rule of origin thresholds (see 1508250023). A removal of, or changes to, the tracing list, the mechanism used to monitor origins of particular parts and components (here), doesn’t warrant a lower regional value content, the lawmakers added.
USTR must also address non-tariff barriers to U.S. auto exports to Japan in TPP, including currency, said the three long-time advocates of currency rules. “Japan has no tariffs on auto imports yet only six percent of autos purchased in its country are foreign-made,” the lawmakers said. “Non-tariff barriers and currency manipulation have effectively shut U.S. car companies out of the Japanese market for years; in 2013 for every one car the U.S. exported to Japan, Japan exported 99 to the U.S. If not negotiated appropriately, TPP will exacerbate this auto trade deficit with Japan and undermine the U.S. auto sector over time.”