JAPAN AUTOMOTIVE TURBULANCE
Shinzo Abe scrambling to respond to US pressure
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