Rep. Kaptur Writes To President Trump, Warns of Japanese Trade Policies

CLEVELAND, OH — U.S. Rep. Marcy Kaptur joined two Democratic representatives in a letter warning President Donald Trump about imbalanced Japanese-American trade policies. The trio of congresspeople wrote the letter in advance of Japanese Prime Minister Shinzo Abe's visit on Friday.

Democratic Reps. Sander Levin, of Michigan, and Bill Pascrell, of New Jersey, joined Kaptur in signing the warning. The letter outlines how Japanese-American trade has been abused by Japanese barriers to U.S. exports. Much of the letter focuses on the exchange between the two nations' auto industries.

Specifically, the letter says that Japan is the third largest global auto manufacturer, but import penetration is frequently lower than 6 percent. The representatives claim the lack of penetration is the result of non-tariff barriers meant to block imports. Those barriers include: taxes, costly certifications for vehicles, changing safety standards and zoning laws that encourage anti-competitive practices.

“Japan’s unfair trade practices have resulted in a massive trade imbalance that have hurt American workers and businesses for decades,” said Kaptur, Levin and Pascrell in a statement. “The U.S. must make it clear that any discussions of a bi-lateral agreement would address currency manipulation, eliminate all of the non-tariff barriers, include provisions to prevent new barriers, and link any U.S. tariff reduction to demonstrable opening of the Japanese market.”

Further, the letter accuses Japanese automakers of intentionally overpricing their domestic automobiles to subsidize cutting the price of their America-bound exports.

The letter concludes with the representatives asking the president to create a new bilateral trade agreement with Japan that includes:

• a strong and enforceable currency manipulation provision;
• the elimination of all non-tariff barriers in the auto sector, including auto parts;
• a process that allows the U.S. to object to new measures as discriminatory before they are put in place;
• a link between a demonstrable opening of the Japanese market to any U.S. tariff reduction; and,
• the ability to “snapback” tariffs or extend tariff phase-outs if the benefits of the agreement are nullified or impaired.

"We respect Japan as an important ally of the United States, and we have spent decades as U.S. policy makers advocating a change in this persistent and damaging trade imbalance. Unfortunately, the barriers to American autos in the Japanese market are deeply structural and shifting, and all negotiated agreements in the past have failed to change the market conditions for U.S. businesses," the letter says. "Any increased investment in the U.S. by Japanese companies does not excuse the unfair treatment of U.S. exports to Japan. Discussions of a bi-lateral trade agreement must hold as a starting point the requirement of real change."

The Washington Post reports that Abe is hoping to develop a deep relationship with Trump and has been one of the few world leaders to quickly and openly embrace the new president. Part of the reason for the tactical embrace may be the Trans-Pacific Partnership, which Trump pulled out of almost immediately after taking office. Abe is still holding out hope that the TPP can be "rekindled," Reuters reports.

You can read the full letter here.

Photo from Rick Uldricks, Patch