The chairman of the Japan Automobile Manufacturers Association said on June 4 that he was “greatly confused” by U.S. demands for auto industry concessions in bilateral negotiations over Japan’s participation in the Trans-Pacific Partnership free trade agreement.
Akio Toyoda, who took over as the head of Japan’s automobile industry association in May, told The Asahi Shimbun and other media organizations that calls from the United States for concessions in six automobile-related areas, such as taxes, distribution and technological standards, did not reflect the reality of the industry.
“Japan is an open market without any restrictions on imported vehicles and without any tariffs (on those imports),” he said.
“We have not officially heard what (the U.S. side considers) constitutes non-tariff barriers. We strongly hope that open dialogue based on facts will be conducted.”
Toyoda, president of Toyota Motor Corp., expressed in particularly stark terms the warnings being repeated by many Japanese industry representatives about the very harsh business environment they are currently facing.
Toyoda said that “Japan’s manufacturing industry will begin to crumble” if the “six woes” it is facing are not addressed.
The phrase “six woes” has recently become part of the argot of Japanese business. The “woes” are a very strong yen, high corporate taxes, delay in free trade agreements, restrictions on the use of temporary workers in manufacturing, environmental regulations, and energy shortages following the Great East Japan Earthquake.
“We are doing something beyond reason by continuing production amid the six woes,” he said.
Toyoda said the yen’s sharp appreciation could force automakers and parts suppliers to relocate production abroad.
“If production capacity for 1 million vehicles is shifted overseas, some 200,000 jobs will be lost instantly,” he said.
Toyoda said statistics showed annual income will decline if workers move from the manufacturing industry, particularly auto manufacturing, to the service sector.
“I believed, and still believe, that Japan needs the automotive industry in part to support the middle class,” he said.
Toyoda also said he supported efforts to make standards for quick rechargers for electric vehicles compatible with each other. There are currently two major sets of standards being proposed by Japan, on one side, and the United States and Germany on the other.
“For manufacturers and customers alike, it is desirable for (the standards) to be unified in the future,” he said.
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