House lawmakers express concern about TPP auto provision

A bipartisan group of House lawmakers is worried that proposed rule of origin standards on autos in a Pacific trade deal will hurt the U.S. industry.

Reps. Marcy Kaptur (D-Ohio) and Debbie Dingell (D-Mich.) on Thursday led a bipartisan group of 20 Democrats and one Republican — all who opposed fast-track authority for President Obama — calling on top U.S. trade officials to ensure that the United States doesn’t lower tariffs until Japan more fully opens its market to imports as part of the Trans-Pacific Partnership (TPP) deal. 

In a letter to U.S. Trade Representative Michael FromanMichael FromanUS will investigate aluminum imports as national security hazard Overnight Finance: WH floats Mexican import tax | Exporters move to back GOP tax proposal | Dems rip Trump adviser's Goldman Sachs payout Froman heads to Council on Foreign Relations MORE, the lawmakers said that an effort to set a 45 percent rule of origin standard for vehicles manufactured in TPP nations would allow Japan "to continue with an undisrupted supply chain that could have a disastrous impact on the U.S. supply chain and resulting loss of American jobs in the years ahead." 

The lawmakers wrote that Japan uses parts produced in non-TPP countries, which could lead to nations like China gaining a global advantage. 

"Strong rules of origin prevent products, especially auto parts, mostly made in China and other non-TPP nations, from getting privileged access to the U.S. marketplace," they wrote.

Rules of origin limit the percentage of a product that can be made up of parts from non-TPP nations. Any products that exceed a cap wouldn't get special market access under the TPP.

They want the TPP to increase the rules of origin standards above that of the North American Free Trade Agreement (NAFTA) and include a tariff phase-out period on Japanese cars, trucks and parts.

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Negotiations with Japan on autos continue during TPP talks in Atlanta this week between the United States and 11 other nations.

Rep. Rosa DeLauro (D-Conn.) said if the 45 percent has been agreed to it “is very alarming.”

“This approach, if agreed to by the negotiators, could put in jeopardy the support of both Democrats and Republicans from auto producing states who were expected to support this agreement’s passage," she said. 

Sen. Sherrod BrownSherrod BrownMajor progressive group rolls out first incumbent House endorsement Dems push for more action on power grid cybersecurity Senate Banking panel huddles with regulators on bank relief MORE (D-Ohio) on Thursday also expressed concern.

“When President Obama committed to renegotiating NAFTA, I never imagined he would negotiate a trade agreement that is worse for American workers," Brown said.

He said that a lower standard "would result in a flood of unfair imports, would offshore jobs and would hurt American workers and manufacturers," he said.

"I strongly oppose this provision and will work to defeat TPP if it remains in the final agreement.”

The U.S. auto industry supports 7.25 million jobs, including 1.55 million Americans employed directly by automakers. 

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