Sunday, May 17, 2015

204.6 - Footnote: lies about TPP and the US auto industry

Footnote: lies about TPP and the US auto industry

There is a footnote to the discussion of the TPP: One of Obama's favorite sales pitches for the pact is that it will be great for the US auto industry. If the TPP is passed, he claims, Ford Mustangs and Chevy pick-ups will be clogging the streets of Tokyo.

Last month he said "I don't know why folks would be opposed to opening up the Japanese market more for US autos" just before bringing out the "level the playing field" cliche.

The problem is, it just ain't true.

First off, Japan imposes no tariffs on US cars shipped to Japan. Rather, in what was an attempt to protect the US auto industry, there are US tariffs on cars imported from Japan - tariffs which would be reduced as part of the TPP. Which means that rather than opening Japan to US cars, it would further open the US to Japanese cars. You can argue whether that is a good thing or a bad one, but what you can’t claim is that it would help the US auto industry.

Oh, but there are so-called "non-tariff barriers" that keep US cars out of the Japanese market, insist the president's trade minions, and those will be dealt with as well.

Sherrod Brown
Okay, except that the big three U.S. automakers, GM, Ford, and Chrysler, are wary of the deal in part because of its lack of controls on currency manipulation, manipulation of which Japan has been notoriously guilty - and controls which Obama opposes.

What's more, auto industry analysts have long said that the real problem in expanding the US auto industry's presence in Japan is that the Japanese just do not want American cars, preferring smaller, more fuel-efficient vehicles to the sort that Detroit insists on making, where words like "room," "performance," "power," and "luxury" hold sway.

Sen. Sherrod Brown observed that past trade deals promising jobs have failed to deliver time and again:
I've seen the same promises - more jobs, higher wages. The jobs don't materialize ... the promises are remade.
This, it seems, is just another example.

Sources cited in links:
http://www.cnn.com/2015/05/06/politics/obama-tpp-trans-pacific-partnership-cars-japan/

3 comments:

Racer X said...

"what you can’t claim is that it would help the US auto industry."

Sure you can. Perhaps when they start getting their butts kicked they'll start making more "fuel-efficient vehicles" and Detroit will stop insisting on making vehicles where words like "room," "performance," "power," and "luxury" hold sway.

Isn't the "better products through increased competition" argument exactly what the open market crowd would claim?

Larry E said...

"Sure you can."

No, you can't. The issue was the fact that TPP would do more to further open the US market to Japanese cars than the other way around.

As I said, you can argue over whether that is a good thing or a bad thing - you could, for example, advance the sort of "secondary effect" argument you did to suggest that in the longer run it would be a good thing - but you can't argue that the TPP, which would have the practical impact of increasing Japanese imports, is by definition a good thing for the US auto industry, which is what the proponents claim.

Larry E said...

One other thing: the "better products through increased competition" argument is indeed "exactly what the open market crowd would claim" - when it suits their purposes.

In this case, it doesn't - so they won't make it here.

 
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