US carmakers weary of Pacific Trade Deal image

US automakers traditionally support trade agreements that deliver new markets for their models, but they’re not doing the victory dance when it comes to the pact between 12 Pacific countries that is close to final negotiations.

According to the Big Three Detroit automakers and the UAW union that speaks for their plant workers, the Trans-Pacific Partnership could actually favor nations that usually don’t play fair, by keeping their markets closed to foreign rivals or by modifying their currency. Most likely, it would allow Japan to keep up its current imbalance of exporting 130 vehicles for every one American vehicle imported. “Given the magnitude of auto trade between the U.S. and Japan — which is primarily one way from Japan to the U.S. — you really can’t have a successful TPP unless you have a successful outcome on automobiles,” comments Matt Blunt, head of the American Automotive Policy Council, the lobbying group of the US auto industry.

The trade deal talks have been revolving around closed markets and currency and the agreement might be finalized at a gathering of officials from the 12 countries taking place this week in Hawaii. The US automakers and their suppliers, responsible for exporting more than $637 billion in vehicles and parts during the past half decade, have been favoring such free-trade deals, but this time seek included protection against nations that purposely weaken their currency. The new trade deal seeks to create a common market from the US and Mexico to Japan and Vietnam, making up in the process around 40 percent of the world’s economic production output.

Via Bloomberg