Japan looks to overhaul its vehicle market

Article by Anita Panait, on June 20, 2013

Japan is looking to overhaul policies that give advantage to local industries lie carmakers as it seeks to revive its economy and join talks over a Pacific-region trade deal, according to Kenichiro Sasae, the country’s ambassador to the United States. During a Bloomberg Government breakfast in Washington, Sasae remarked that for the first time, “people are seriously thinking that we need to change some things," adding that otherwise the Japanese people will become “second-rate citizens of the world."

Japan is hoping to join 11 nations over talks set next month on the Trans-Pacific Partnership, a free-trade agreement that will create a region with annual economic output of $26 trillion. The American Automotive Policy Council – which represents US carmakers Ford, General Motors and Chrysler Group -- is opposing Japan's inclusion in the talks, saying that the country is manipulating its currency to favor exports, and is shutting out foreign rivals. Since September 2012, the yen has depreciated 23 percent against the US dollar.

Sasae, however, remarked that Japan can't really manipulate the exchange rates, noting that the Japanese government has not really intervened for some time to the market since it is impossible to control. He quipped that perceptions of Japan as an “inward-looking society favoring domestic industries” are out of date.

Japan’s inclusion in the talks may slow down negotiations, primarily because Japan’s economy of $5.9 trillion in annual output may further complicate the process. The U.S. Trade Representative's office also has cited other barriers to Japan’s inclusion in the talks, such as some of the country’s agricultural policies. Sasae, however, said that he doesn't expect Japan's participation to slow down negotiations. He remarked that there are concerns that “Japan is coming late,” which may result to some delay of the process. [source: automotive news - sub. required]

Topics: japan

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