TPP is Ludicrous: US Auto, Canadian Agri Edition

♠ Posted by Emmanuel in ,, at 2/15/2012 02:44:00 PM
Here are two more examples of the rather enormous roadblocks to the US government attempting to expand an APEC PTA to counterbalance growing Chinese trade dominance in the region. In their own ways, they are rather ludicrous examples of how Trans-Pacific Partnership (TPP) enlargement is infeasible at the current time given the policies of certain aspirant nations:

(1) Having largely survived via government bailouts, American automakers are now encouraging the US government not to let Japan join TPP enlargement negotiations for the reason that the Japanese supposedly throw up "non-tariff barriers." Having tried to pry open the Japanese market before via the blunt route of trade negotiations, it seems these automakers haven't yet learned their lesson. That is, selling big, gas-guzzling left-hand drive cars in a market where almost all cars are small, frugal and right-hand drive doesn't work. Quoting from a Japanese official on these alleged NTBs:
A Japanese government source in Tokyo rejected Detroit's contention that regulatory and other hidden or structural barriers keep U.S. cars out of the Japanese market. "Japan has no tariffs on cars and our acknowledgment is Japan has no non-tariff barriers either," said the government source, speaking on condition of anonymity.

"U.S. cars do not fit Japan's market or Japanese consumers' requirements because of size, high fuel consumption and higher prices. They need to have a line-up that suits Japanese consumers' preferences," the source added.
American consumers may have an enduring appetite for crapmobiles from Government Motors, but that does not necessarily mean that Japanese consumers are similarly gullible. I will not even get into the matter of agriculture where the TPP will supposedly offer no opt-outs.

(2) It appears that Canada in the TPP too looks like a long shot given its liberal use of agricultural supports. Canadian Trade Minister Ed Fast is looking to gain the approval of ANZ countries in particular of this matter while in Singapore:
A tariff structure that supports domestic farmers should not be a barrier to Canada's entry to a pan-Pacific trade pact, although all issues are up for negotiation, Canada's trade minister said on Wednesday. Ed Fast, interviewed in Singapore at the end of a tour of Southeast Asia, said most of the nine countries working toward the conclusion of a Trans-Pacific Partnership (TPP) deal supported Canada's entry into the negotiations.

He declined to say which countries did not back the plans. News reports have suggested Australia and New Zealand are unhappy about Canada's supply management support program for poultry and egg producers, a network of marketing boards and quotas intended to keep markets stable and ensure farm incomes.
It may be the case that TPP will be shot through with opt-outs if the likes of Canada and Japan come on board without significant changes in agricultural policy, negating the American assertion that it is a "high standard" FTA in the process. (See a recent post on Japan in the TPP.)