Concession ahead of TPP talks: US seen waiving tariff on 80% of Japanese autoparts

Concession ahead of TPP talks: US seen waiving tariff on 80% of Japanese autoparts

ATLANTA — The U.S. is likely to eliminate import tariffs on more than 80% of autoparts made in Japan under the proposed Trans-Pacific Partnership trade pact.

     The two nations are finalizing bilateral talks on automotive trade ahead of ministerial-level negotiations by representatives from the 12 TPP nations to start here Wednesday.

     Before the last ministerial-level talks in late July, the two countries agreed the U.S. should exempt more than 50% of Japanese-made parts from import tariffs. The American side now appears to be making an even bigger concession.

     Japan exports 100 or so key autoparts to America. Seat belts, brakes and exhaust gas filters are among those likely to be exempt from tariffs as soon as the TPP takes effect. But transmissions, gearboxes and other parts for which U.S. companies are more protective would remain subject to duties. Japan wants all autoparts exempted within 10 years.

     Japan sends 2 trillion yen ($16.5 billion) in autoparts to the U.S. annually. Removing the tariff on all of them would save Japanese companies around 50 billion yen per year. Tariffs on completed vehicles are expected to be lifted in about three decades.

     Automobiles are also a crucial topic in the broader TPP talks. Mexico wants any vehicle receiving a tariff exemption to have a high percentage of its components made in the 12 TPP economies, while Japan sees a lower percentage as appropriate.

     Rice is another major topic of Japan-U.S. negotiations linked to the pact. Japan, which plans to propose exempting 70,000 tons of imported rice a year from tariffs, is considering adding 50,000 tons to its offer.

     Concessions from both sides in these two areas would propel the TPP talks. Japan is eager to reach an agreement in Atlanta because missing this opportunity could delay a deal by a year or longer. But it is unclear whether the 12 countries can reach a general agreement this time, amid discord over drug development data protection and dairy trade.

Concession ahead of TPP talks: US seen waiving tariff on 80% of Japanese autoparts