Sat, May 18, 2019 - Page 10 News List

US ‘will not seek’ Japan car limits

Bloomberg

US Trade Representative Robert Lighthizer had assured Japan that Washington would not seek restrictions on vehicle exports, Japanese Minister for Economy, Trade and Industry Toshimitsu Motegi said yesterday, a nearly US$50 billion trade sector that could cloud a state visit next week by US President Donald Trump.

Motegi told a news conference in Tokyo that he contacted his counterpart after Bloomberg reported on a draft executive order that people familiar with the matter said that Trump is expected to sign this week.

Under the proposed deal, the US would give the EU and Japan 180 days to agree to limit vehicle imports into the US in return for delaying new auto tariffs.

“Japan opposes any measure that distorts free and fair trade,” Motegi said. “We checked with the US side again and they said they were not planning to seek such measures.”

Japan in September last year reluctantly agreed to begin bilateral talks with the US after being threatened with punitive tariffs on its lucrative vehicle exports, which form a large proportion of its trade surplus.

Lighthizer has told US lawmakers that the talks were a matter of urgency, because US farmers risk losing market share to Pacific and European nations that have already sealed trade deals with Asia’s second-largest economy.

In a September joint statement, the two nations agreed not to take any actions against the spirit of the agreement while talks were in progress. The first round was held last month.

Motegi drew a distinction between import restrictions, such as tariffs, and export restrictions, such as quotas, to which he said Japan was particularly opposed.

“If the US urges Japan to apply such export restraints in a voluntary manner, Japan may not accept that,” said Junji Nakagawa, a professor at Chuogakuin University in Chiba. “Or Japan should not accept that. If the US persistently urges that point, then maybe the negotiation will be a very tough one.”

Such restrictions could be seen as a violation of WTO rules, he added.

According to the executive order, the US administration has determined that imports of vehicles into the US present a threat to national security, because they have hurt domestic producers and their ability to invest in new technologies.

Trump, who has frequently criticized Japan for what he calls “unfair” trade, is set to become the first foreign leader to meet Japan’s new Emperor Naruhito during a state visit running from Saturday next week to May 28.

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