Obama holds ground on opening Japan to Detroit 3
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WASHINGTON (Bloomberg) -- President Barack Obama won't back off demands that Japan ease barriers for U.S. automakers before joining negotiations for a regional Pacific trade agreement when he meets today with Japanese Prime Minister Shinzo Abe, White House aides said.
A more open market for companies such as Ford Motor Co., General Motors and Chrysler Group remains "an important pre-condition" to Japan's potential entry into a proposed trade pact known as the Trans-Pacific Partnership, said Mike Froman, Obama's deputy national security adviser for international economic affairs.
The partnership "is intended to be a comprehensive, ambitious, high-standard, 21st-century trade agreement," Froman said on a conference call with reporters. "And anybody who joins TPP would be expected to sign on to that goal."
Trade and security issues will be prime topics for the two leaders at their White House meeting. Abe, whose Liberal Democratic Party won a landslide victory in December's general election, arrived in Washington Thursday night.
He is seeking to bolster the U.S.-Japan alliance as China's growing economic and military clout has led to disputes over territory and North Korea shows no signs of easing its nuclear ambitions.
The Trans-Pacific Partnership is being negotiated among the U.S. and 10 other Pacific nations with the aim of bringing down tariffs, strengthening patent protection and allowing greater access to government contracts.
Automaker pressure
Froman said he expected the two leaders to "review the status" of consultations about Japan's interest and the U.S. insistence that all participants meet the standards for lowering trade barriers to be part of the accord.
Joe Hinrichs, Ford's president of the Americas, urged Obama to use the meeting to press Abe to open the Japanese auto market and refrain from weakening the yen.
Obama should "send a clear message that any future trade policy with Japan must ensure a level playing field and not come at the expense of American workers," Hinrichs told workers yesterday at an engine plant in Brook Park, Ohio.
Less than 4 percent of auto sales in Japan last year were brands from companies based outside the country, Hinrichs said.
Abe, 58, has said he won't join negotiations on the TPP if Japan is required to abolish tariffs across the board.
Currency issue
Another concern for U.S. companies is the slide in Japan's currency. The yen set a record with 12 weeks of consecutive declines against the dollar and has tumbled 14 percent from mid- November. The currency strengthened 0.5 percent to 93.11 per dollar at 5 p.m. yesterday in New York.
Froman declined to say whether the two leaders would discuss currency valuations at their meeting.
Japan, the world's third-largest economy, is struggling to escape three quarters of contraction through December and 15 years of falling prices. Abe has pushed the central bank to be more aggressive in combating deflation, and will replace the Bank of Japan governor and his two deputies next month.
Investors are cheering Abe's policies. The Nikkei 225 Stock Average is up about 24 percent in three months, the largest gain in 18 global stock market indexes tracked by Bloomberg.
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