Japan ‘clunkers’ angers many in U.S.

Lawmakers and U.S. automakers are peeved with Japan, which has launched a cash-for-clunkers program that doesn’t accept American-made cars.

Under Japan’s program, consumers who trade in a car at least 13 years old can get a tax cut of up to $2,800 toward the purchase of a new car.

But the program excludes imported vehicles from companies that have low sales in Japan. That covers General Motors, Ford and Chrysler, according to the American Automotive Policy Council, which has pressed the Obama administration for action.


U.S. producers are particularly irked since Japanese companies did well under the cash-for-clunkers program Congress adopted. Just fewer than half the 677,000 vehicles sold were made by Japanese companies, though Japan notes that 80 percent of Japanese-brand autos sold in the U.S. are American-built .

The clunkers program is aggravating a longstanding sore point with American automakers. U.S. companies complain that Japanese trade barriers have kept the market for American-built cars and trucks small. Only about 10,000 U.S. cars are sold in Japan. By comparison, more than 1 million Japanese cars have been sold in the States this year, even in a depressed market.

“I urge the Japanese government to stop discriminating against American workers and manufacturers, and I urge our government to take action if they continue these discriminatory policies,” Sen. Debbie StabenowDeborah (Debbie) Ann StabenowBattle looms over funding for Trump's border wall Parties start gaming out 2020 battleground The Hill's Morning Report — Split decision: Dems take House, GOP retains Senate majority MORE (D-Mich.) said in a statement.

She said that the U.S. program applied to all cars sold in the U.S., “not just American cars, which is what I would have greatly preferred.”

A source at the Japanese embassy said U.S. automakers choose to export their cars under a program that does not require fuel efficiency tests. As a result, the cars are not eligible for the Japanese cash-for-clunkers program.

However, he said the U.S. could choose to export cars under the normal export process. This would require that they submit their vehicles to tests at a cost of $4,000 per model.

“We don’t think we exclude the imported cars,” the embassy source said.

It’s not clear what the U.S. can do. A spokeswoman for the Office of the U.S. Trade Representative said administration officials have raised the issue with

Japan, and that the U.S. wants changes that would offer U.S. vehicles a greater chance of qualifying.

Japan’s program is set to expire at the end of March. Steve Collins, president of the auto council, said at a minimum the program should be expanded to include all imported vehicles — if it is, in fact, extended.

Obama pushes new Asian-Latin trade pact

The Obama administration has announced negotiations on a regional trade pact with seven Asian and Latin American countries.

In a note published in Tuesday’s Federal Register, the administration said it would negotiate the Trans-Pacific Partnership (TPP) with Australia, Brunei, Chile, New Zealand, Peru, Singapore and Vietnam.

The goal of the pact would be to create a huge free-trade zone connecting North and South America with fast-growing Asia.

In their wildest dreams, trade lobbyists hope big economies like Japan, Canada and South Korea could one day join the group.

Skeptics say big, broad trade deals like the one the administration is contemplating take years, in some cases decades, to finalize. They question why the administration isn’t moving forward with three free-trade deals already negotiated by the George W. Bush administration with South Korea, Colombia and Panama, all potential TPP members themselves.

The South Korea deal alone would represent the biggest free-trade deal for the United States since the North American Free Trade Agreement (NAFTA) with Canada and Mexico.

But business groups in the United States seem supportive of the talks as a step toward deeper integration with Asia that could prove crucial from an economic and national-security perspective.

“When our corporate executives come back, they increasingly say their contacts see China as displacing the U.S. as an economic player in the region,” said Cal Cohen of the Emergency Committee on American Trade (ECAT), which represents corporate CEOs on trade issues.

At the same time, groups that support the new negotiations still want the old agreements to be approved.

“We strongly support this initiative, as we believe it will build a strong foundation for a wider Asia-Pacific trade area,” said Doug Goudie, a trade lobbyist for the National Association of Manufacturers.

“At the same time, we are hopeful the administration and Congress will also focus quickly on the pressing need to pass the three pending FTAs with Colombia, Korea and Panama,” Goudie added.


Alan Wolff, who leads Dewey & LaBoeuf’s international trade practice, says there is a “strong school of thought” in Beijing and Tokyo that it would be good for China and Japan to enter regional trade deals in Asia that would exclude the United States.

“For geopolitical reasons, that’s a disaster for our country,” said Wolff. “For economic reasons, that’s a disaster for this country.”

The announcement of the TPP is also interesting for one other reason.

The U.S. Trade Representative followed the rules under the expired fast-track law in notifying Congress. This suggests the Obama administration wants fast-track renewed, something that will be tough even though the president’s party controls Congress.