Saturday, February 23, 2013

To Be Sure, It’s Not Really about Tariffs


White House and USTR officials have been quick to add that everything is on the table. Fair enough. But Japan is not the only country that will have a hard time clearing domestic obstacles without one exception or other, and there must be more powerful agricultural lobbies than rice farmers. Does this mean that the Abe and Obama administrations had this preliminary outcome in their sights all along? Could be. And with the 20-30 month-old beef already taken care of under the Noda administration—seriously, Abe really should thank Noda, if he hasn’t already—the Detroit Three’s grievances against Japanese auto manufacturers and US insurers’ complaints against the Japan Post group’s efforts to expand its insurance operations now loom as major non-tariff barrier issues that will have to be addressed, for starters, by the Obama administration, desirably from its viewpoint with a little help from the Abe administration, in the 90-day process to secure congressional consent to allow Japan to join the negotiations.

4 comments:

Martin J Frid said...

I wonder about the way the US manages to maintain its high tariffs on Japanese made cars. Any thoughts? These are real numbers, nes pa?

Jun Okumura said...

Martin:

The United States maintained its right to impose those auto tariffs after the Uruguay Round negotiations and does not have an FTA with Japan. FYI the US auto industry secured a five-year delay for the elimination of auto import tariffs under the KORUS FTA.

Martin J Frid said...

So the US also has tariffs against Korean vehicles? Interesting world we live in.

Jun Okumura said...

Martin:

In principle, each WTO member country or region (think, Taiwan) has uniform tariffs (or none) for imports from all WTO countries except from countries with which it has a free trade agreement or developing countries to which it provides preferential tariffs. US automakers secured 5 and 10 year delays for passenger cars and trucks respectively. Look here (http://www.uskoreacouncil.org/sites/default/files/files/Autos-fact-sheet-1.pdf)for more details.