The UAW and Once-Big Three try to exclude Japan from free trade talks
posted at 8:41 am on April 3, 2013 by Karl
Does Asian trade policy hold a larger lesson about the decline of our republic?
A couple of weeks ago, Japanese Prime Minister Shinzo Abe announced that Tokyo would seek to join talks on a U.S.-led Pacific free trade pact called the Trans-Pacific Partnership (TPP). Opening Japan to more competition is a significant (and the most free-market) part of Abe’s plan to revitalize Japan’s economy. The United States and 10 other countries negotiating the TPP could formally decide whether to allow Japan into the talks later this month, during the annual trade ministers meeting of the Asia-Pacific Economic Cooperation forum. Tokyo is seeking bilateral meetings with existing members to gain entry.
The reaction from the Obama administration ran true to form. U.S. Trade Representative Ron Kirk put out a statement looking forward to engaging with Japan “[i]n close consultation with Congress and our domestic stakeholders.” Congress wasted no time in “consulting.” Dozens of protectionist Democrats, led by Rep. John Conyers (coincidentally of Michigan) expressed their alarm, almost entirely about the Japanese auto market.. But it’s not just Democrats. Some Republicans, like House Ways and Means Chairman Dave Camp (also coincidentally of Michigan) are also, er, “concerned” about the Japanese menace.
A skeptic might wonder whether these pols are merely parroting the concerns of those aforementioned “stakeholders.” The UAW — also a stakeholder in the Democratic Party — is apoplectic over the idea that Japan might join the TPP talks. Conversely, the Once-Big Three’s opposition is expressed by the American Automotive Policy Council, in the form of GOP Gov.-turned-lobbyist Matt Blunt.
Outside the AAPC, Ford has taken the lead in opposing Japanese participation in the free trade talks. As Japan has a zero tariff on automobiles (and the U.S. still maintains a 2.5% tariff), Ford focuses on non-tariff barriers, particularly charges that Japan manipulates its currency by devaluing the yen. General Motors stays quiet on that subject, perhaps because GM Korea CEO Sergio Rocha recently urged South Korea to engage in similar tactics. Chrysler is also pretty quiet, perhaps hoping everyone will for get they’re now owned by Fiat.
Complaints about currency devaluation are vaguely amusing, given our own government’s stretch of quantitative easing — which may be one reason the Obama administration maintains Japan is not manipulating the yen. But on a more serious note, one might ask whether the issue — and other non-tariff barriers — might come up in the TPP talks if Japan is allowed to join them. If we want more access to Japanese markets and a smaller trade deficit, maybe we should try negotiating with Japan.
Ray Mungenast, chairman of the American International Automobile Dealers, makes short work of the stakeholders’ remaining talking points against Japan joining the TPP talks. The Once-Big Three have closed most of their Japanese dealerships since 1996, and don’t really sell the small-engine cars that make up the vast majority of sales in Japan. It’s almost like they’re trying to be uncompetitive.
I could close with the standard reminder that US consumers literally pay the price of the protectionism sought by the UAW, the Once-Big Three, and their water-carriers in the Beltway. It’s as true now as always. It also hurts American business that actually want to export and compete in Japan.
But it’s also worth pointing out how symptomatic this issue is of the way the Obama administration — and increasingly, Beltway GOPers — routinely operate. After all, how different is this from the Obama administration’s bailout of the auto industry in favor of the UAW? It reflects a philosophy in which auto companies exist to support union workers and their fat pensions, and taxpayers exist to support the auto companies’ surrender to that philosophy. The same underlying philosophy gave birth to Obamacare by making health insurers, pharmacos and unions effective architects of the legislation. Similarly, the cap-and-trade legislation that passed the House was mostly a product of favored energy companies. And today, immigration legislation is mostly negotiated by the Chamber of Commerce and the AFL-CIO, safely out of public view. Call it government of the stakeholders for the stakeholders.