Japan may crack open market to join U.S. free-trade agreement

Automotive News | March 6, 2013 - 10:22 am EST

TOKYO -- Is Japan poised to open its market to more imports?

Japan's automakers are desperate for their country to enter a free-trade deal with the United States. But U.S. automakers oppose Japan's entry, saying Japan's market is closed.

Now local media in Japan say the government is secretly looking at ways to speed the country's onerous import screening process, a traditional trade beef of the Detroit 3.

The steps come on the heels of Prime Minister Shinzo Abe's recent trip to Washington, during which he pitched President Obama on Japan's entry to the Trans-Pacific Partnership talks.

That visit ended without any commitments. Both sides said they would remain in "consultations."

The communique highlighted the automotive industry and nontariff trade barriers as key areas of outstanding concern.

But it appears Japan may be moving to address those concerns.

It can take months for some import cars to clear Japan's safety checks. But low-volume imports -- i.e. U.S. nameplates -- can get expedited handling that relies on documents, not inspections.

Japan's government may now expand that expedited process to a greater range of vehicles, Japan's Kyodo News agency reported.

That would theoretically make it easier to import U.S. brands.

At the same time, Japan's government is willing to accept a long-term phaseout of U.S. tariffs on Japanese imports, rather than a quick discontinuation, the Nikkei business daily reported.

Under its 2012 free-trade agreement with South Korea, the United States said it would phase out its tariff on Korean cars in five years and on Korean trucks in 10 years.

Washington wants an even longer phase-out period for Japanese autos, the Nikkei says, though it didn't specify how long.

Japan is poised to oblige, the reports said.

Those are apparently the compromises floated by the Abe government, and where the negotiations stand.

But it's still a huge question mark whether those measures will do anything to lift sales of American cars in Japan or allay Detroit's fears of a Japanese import surge under the free-trade agreement.

Hans Greimel is Asia editor for Automotive News.Hans Greimel is Asia editor for Automotive News.

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