USTR gathers input for potential U.S.-Japan trade talks

Date: Tuesday, November 27th, 2018
Source: American Shipper

The Office of the U.S. Trade Representative has received more than 100 stakeholder submissions to inform its approach toward bilateral discussions.

The Northwest Seaport Alliance (NWSA), auto workers and the semiconductor, agricultural and forklift industries were among groups that submitted comments to the Office of the U.S. Trade Representative on potential U.S.-Japan trade agreement talks.
USTR collected comments through 11:59 p.m. ET Monday. As of 11 a.m. Tuesday, the agency had posted 111 separate written submissions, including requests to testify at a Dec. 10 hearing at the International Trade Commission to gather input on potential bilateral trade agreement negotiations.

The Northwest Seaport Alliance expressed “full support” for an outcome of U.S.-Japan trade agreement talks that builds on an “already strong and mutually beneficial trade relationship,” as the alliance’s success as an airport and seaport gateway is “inextricably” linked to the United States’ relationship with Japan, the alliance said in its submission.
NWSA also called for any new trade agreement to eliminate steel and aluminum tariffs and avert future implementation of automotive import tariffs, as $382 million in imported steel and aluminum traveled from Japan through Seattle-Tacoma International Airport (Sea-Tac) and the seaports of Seattle and Tacoma, “while $3.9 billion in vehicles and parts were imported from Japan,” according to the alliance.

In total, more than $18 billion in two-way trade was transported through NWSA’s three ports in 2017, with Japan being the No. 2 bilateral trading partner through the Port of Tacoma, the No. 4 two-way trade partner through the Port of Seattle and the No. 6 bilateral trading partner through Sea-Tac.
The Industrial Truck Association (ITA), which represents forklift manufacturers based in the U.S., Japan, China, Europe and other areas, wrote in support of a U.S.-Japan trade agreement, noting National Association of Manufacturers statistics indicating Japan is the fourth largest export market for U.S. manufactured goods, with exports totaling $53.15 billion last year.
“International trade issues loom especially large today as governments’ desires to boost domestic employment compete with the concern that national protectionist policies will ultimately constrict rather than expand worldwide production,” the ITA said.
Since 2009, the U.S. and Japan have maintained zero tariffs on each other’s forklift exports and should continue the free market access, ITA said.
SEMI, a global industry association representing more than 2,100 members involved in the technology and business of the electronics manufacturing supply chain, outlined 10 negotiating objectives for USTR to pursue with Japan, including simplification and harmonization of customs processes, removal of tariffs and non-tariff barriers on semiconductor trade, and robust intellectual property safeguards and significant penalties for violators of IP rights.

Border processing should be “quick, transparent and predictable,” and parties should work to use electronic customs forms to expedite processing; tariffs should be eliminated on semiconductors and all technology products relying on electronic chips; and talks should yield strong copyright standards, patent protections and regulations to safeguard industrial design, SEMI said.
More than 30 years after a dispute between the U.S. and Japan on semiconductor trade resulted in a 1986 agreement to ensure, among other things, fair market share in Japan for U.S.-made semiconductors, the two countries account for the vast majority of global market share.
SEMI said the U.S. currently holds more than 40 percent of global market share, and Japan holds more than 30 percent.
The association said it would support a “high-standard trade agreement” between the U.S. and Japan that spurs further growth for the semiconductor industry and each country’s economy.
But not all organizations voiced resounding support favor for a U.S.-Japan trade pact.
United Automobile, Aerospace and Agriculture Implement Workers of America (UAW) said trade with Japan has been an “unambiguous failure” for American workers, including efforts to open Japan’s auto market to foreign competition.

UAW noted that Japan is the third largest auto market in the world, but imported only 351,000 vehicles in 2017, accounting for 6.7 percent of its sales. Meanwhile, the U.S. imported 8.6 million vehicles, accounting for 49.2 percent of sales, UAW said.
The labor union said an even playing field is made less likely because Japan maintains an automotive tariff of zero and insulates its domestic auto manufacturers through non-tariff barriers, such as currency manipulation, discriminatory taxation, burdensome certification procedures for auto imports and several safety, noise and pollution standards that don’t conform to international standards.

If the U.S. includes automobiles in trade negotiations, USTR should undertake several efforts, including establishment of an import quota for Japanese vehicles; requiring Japan to open its auto market before the U.S. eliminates tariffs; requiring strong labor standards; outlining enforcement measures against currency manipulation; strong rules of origin, using the U.S.-Mexico-Canada Agreement as a basis; carved-out protections for next-generation auto components; full maintenance of “Buy American” policies; and omission of any investor-state dispute settlement provisions.
“The UAW is deeply concerned about the potential negative consequences on American workers and our communities if the administration goes through in negotiating a trade deal with Japan,” the union said. “We appreciate this opportunity to present our concerns and look forward to working with USTR.”

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