This just in: “The U.S. auto industry has dropped a demand for Japan to abolish rules related to minivehicles ahead of upcoming talks between the two sides over the Trans-Pacific Partnership (TPP) free trade zone,” The Nikkei [sub] writes after reading this story.
Detroit made the generous concession to let Japan have its kei cars ahead of talks between Japan and the U.S., to be held in Washington on Tuesday. 1.52 million kei cars changed hands in Japan in 2011.
The small cars enjoy lower taxes and lower insurance rates in Japan. Previously, the Big Three U.S. automakers found that highly unfair. Rumor has it that after one of the three asked to have the demand dropped, the matter is fair again.
The Nikkei heard that U.S. automakers are worried that opposition against Japan could delay negotiations with other presumptive TPP members. GM wants to expand into fast-growing countries such as Vietnam and Malaysia. These countries are taking part in the TPP talks. A successful deal would make U.S. cars more competitive in these countries.
In the meantime, Japanese are worried about “GM crops.” No relation to the General – the “GM” stands for Genetically Modified. Allegedly, two thirds of U.S. food already is “Frankenstein food,” Japan’s Majiroxnews says. Fanning these flames would have much better chances for success than denying the Japanese their lower taxed kei cars.