Obama Presses Japan to Open Auto Market to US Carmakers
US President Barack Obama urged Japan to ease restrictions on American automakers as a condition for joining the Trans-Pacific Partnership during talks with Prime Minister Shinzo Abe in February 2013.
US President Barack Obama raised the issue of Japan’s closed automotive market during a meeting with Japanese Prime Minister Shinzo Abe in February 2013, making clear that American access to Japanese car buyers would be a condition for Japan’s potential entry into the Trans-Pacific Partnership (TPP) trade pact.
The TPP, described by US officials as a high-standard, comprehensive trade agreement, was under negotiation at the time, with Japan seeking to join ongoing talks. American automakers including General Motors, Ford and Chrysler had long complained of limited access to Japan’s domestic market, citing regulatory barriers and currency policies that favoured Japanese brands.
US automakers push for market reforms
Ford, in particular, called for the US administration to demand fairer terms for American manufacturers. The company argued that Japan’s regulatory environment and the falling yen put US carmakers at a disadvantage. At a plant in Brook Park, Ohio, Ford executive Joe Hinrichs told workers that any future trade deal with Japan must ensure a level playing field for American workers and manufacturers.
US officials echoed these concerns, pointing to Japan’s historically low import penetration for foreign cars. While American brands struggled to gain a foothold, Japanese manufacturers had expanded their presence in the US. The US government’s stance was that Japan would need to take concrete steps to address these issues to participate in the TPP.
Currency and trade tensions
The yen’s sharp decline in the months leading up to the summit was a source of additional friction. Since mid-November 2012, the Japanese currency had fallen 14% against the dollar, making Japanese exports more competitive and raising concerns among US manufacturers about currency manipulation. Japanese policymakers, meanwhile, were grappling with deflation and economic stagnation, facing pressure at home to revive growth.
Security and trade on the agenda
The February 2013 meeting between Obama and Abe covered more than trade. Security issues, including China’s territorial claims and North Korea’s nuclear ambitions, were also discussed. Still, for US automakers and their workers, the focus remained on access to Japan’s lucrative car market and the terms of any future trade agreement.
As TPP negotiations continued, the US position was that Japan’s participation would depend on its willingness to open its auto sector and address currency concerns. For American carmakers, the outcome of these talks would shape their prospects in one of the world’s largest automotive markets.
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