JA­PAN AUTOMOTIVE TURBULANCE

Shinzo Abe scram­bling to re­spond to US pres­sure

The Star Early Edition - - BUSINESS REPORT -

JA­PAN is scram­bling to re­spond to trade pres­sure from US Pres­i­dent Don­ald Trump, with Prime Min­is­ter Shinzo Abe plan­ning to meet the head of Toy­ota Mo­tor this week and busi­ness lobby Kei­dan­ren plan­ning a Trump task force.

Abe will visit Wash­ing­ton on Fe­bru­ary 10 for talks with Trump at which the US leader is ex­pected to seek quick progress to­ward a two-way trade deal with Ja­pan and dis­cuss the automotive sec­tor.

Ahead of those talks, Abe would meet with Toy­ota’s chief ex­ec­u­tive, Akio Toy­oda, two sources told Reuters.

In a re­cent phone call with Abe, Trump re­it­er­ated his pledge to cre­ate jobs in the US and asked that the Ja­panese automotive in­dus­try con­trib­ute, the Nikkei busi­ness daily re­ported, quot­ing uniden­ti­fied Ja­panese gov­ern­ment of­fi­cials.

The two lead­ers dis­cussed the automotive in­dus­try, se­nior gov­ern­ment spokesman, Koichi Hag­iuda, told re­porters. A White House state­ment said the two “com­mit­ted to deepen the bi­lat­eral trade and in­vest­ment re­la­tion­ship”.

Ja­pan needed to craft a plan to show that its firms, car mak­ers es­pe­cially, would con­trib­ute to cre­at­ing US jobs, a former Ja­panese diplo­mat said. “I think that is the only way for­ward to make the bi­lat­eral sum­mit a suc­cess.”

Abe has left the door open to dis­cussing a free trade agree­ment (FTA) with the US, but some of­fi­cials wor­ried Ja­pan would have lit­tle to gain while com­ing un­der in­tense pres­sure from Wash­ing­ton. Bi­lat­eral talks on spe­cific sec­tors such as au­tos, how­ever, are an op­tion, of­fi­cials have said.

Trump has re­peat­edly at­tacked Ja­pan’s automotive mar­ket as closed, in an echo of crit­i­cisms heard two decades ago. Ja­pan has re­jected that ac­cu­sa­tion, say­ing it did not im­pose tar­iffs on US ve­hi­cle im­ports nor put up dis­crim­i­na­tory non-tar­iff bar­ri­ers.

Ja­panese car mak­ers have de­vel­oped SUVs, mini-vans and pick-up trucks specif­i­cally tar­get­ing Amer­i­can con­sumers’ taste for big­ger cars, while US brands have strug­gled to make in­roads in Ja­pan, where drivers pre­fer do­mes­tic brands.

For­eign-branded cars ac­counted for 7 per­cent of the Ja­panese pas­sen­ger car mar­ket, led by Ger­many. US brands col­lec­tively made up less than a third of 1 per­cent of pas­sen­ger cars sold in Ja­pan last year.

Toy­ota has come un­der fire from Trump for plans, an­nounced in 2015, to shift pro­duc­tion of its Corolla sedan to Mex­ico from Canada. Ear­lier this month, Ja­pan’s top car maker said it would in­vest $10bil­lion (R136bn) in the US over the next five years, the same as the pre­vi­ous five years.

Toy­ota said it di­rectly em­ployed about 40000 Amer­i­can work­ers as of De­cem­ber 2015, and in­di­rectly more than 200 000 if deal­ers and sup­pli­ers were in­cluded.

Ja­pan’s big­gest busi­ness lobby, Kei­dan­ren, wanted to beef-up its in­for­ma­tion gath­er­ing and anal­y­sis of the Trump ad­min­is­tra­tion’s poli­cies, while con­vey­ing data on Ja­pan’s im­por­tance to the US econ­omy, an of­fi­cial said.

“We will cre­ate a task force, the main pur­pose of which is to con­vey cor­rect in­for­ma­tion about the con­tri­bu­tion of Ja­panese firms in the US,” said an­other Kei­dan­ren of­fi­cial, who de­clined to be iden­ti­fied. – Reuters

PHOTO: BLOOMBERG

Ja­pan’s Prime Min­is­ter, Shinzo Abe, is ex­pected to visit Wash­ing­ton next month for talks with US Pres­i­dent Don­ald Trump.

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