By on April 16, 2013

Now that the U.S. and Japan have agreed on a watered-down version of the Trans-Pacific Partnership trade negotiations (America will keep its beloved chicken tax for at least another decade, Japan will protect its rice farmers from the evils of cheap American rice,) negotiations between  the EU and Japan about a trade pact are getting underway, with considerably less drama.

The lead-up to the U.S.-Japanese discussions was big on harebrained hubris that played well at home but caused rolling eyes in more worldly circles.  For years, Detroit carmakers accused Japan of closing its markets to American cars that few want in Japan and that Detroit makers don’t really try to sell to the Japanese in earnest. While a Japanese yen got stronger and stronger to the point of killing the Japanese export machine, a cabal of Detroit propagandists, UAW operatives and Democrat lawmakers could tell each other the story of Japanese currency manipulation, detracting from the fact that America was busy devaluing its dollar. And while the U.S. market  is ringfenced by onerous regulations  that allow only  deep-pocketed and very determined importers to sell their cars in the U.S., the Detroit propaganda machine successfully sold the story of insidious albeit hard to find “non-tariff barriers” that allegedly close the Japanese market tighter than a you-know-what.

Compared to this lunacy that would have made a Goebbels (“The bigger the lie, the more people will believe it”) envious, the discussions between Japan and Europe are a down-to-earth exercise in realpolitik. The EU position is simple: The EU charges 10 percent tariff on imported cars, Japan charges none. So, what can Japan offer for the EU to drop its customs duty?

Says The Nikkei [sub]:

“The EU’s focus appears to be on regulatory issues, such as treatment of minicars. European automakers, like their Japanese rivals, excel in compact models. But the European Automobile Manufacturers Association complains that Japan gives minicars preferential treatment, including tax advantages, that essentially shuts out European competitors.

The EU’s demands are likely to include allowing European carmakers to export to Japan as long as they meet EU safety standards. With sales in their home market suffering from the economic chill caused by the euro crisis, the Europeans fear added Japanese competition. The EU is offering to lower tariffs only to the extent that Japan complies on deregulation.”

An alignment of EU and Japanese automotive standards should be quit doable. Japan and  the EU are UNECE members, however, Japan so far has adopted only a subset of the UNECE regulations. The kei car issue is a bit tougher. Relaxed kei car regulations that would extend the kei car benefits to slightly larger and slightly better motorized versions could include a number of European models, and would at the same time be welcomed by Japanese makers who could sell what currently remains largely a Japanese oddity in foreign markets.  Also, European farmers aren’t big on rice, and both Europe and Japan share a common disdain for gene manipulated food.

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6 Comments on “And Now, Japanese Trade Talks Sans The Silly Propaganda...”

  • avatar

    bertel, as the wave of left wing parties take over more governments in Europe the pressure ti circle the wagons grows. So the speed and ease if negotiations between Europe and Japan is driven by political considerations. True?

    • 0 avatar

      Marcelo, the EU negotiations are done at the EU level, not by national governments (which would make the whole process a nightmare). Final approval is by all member countries, though. But at that point there is no chance to amend or modify the agreement, only to approve or reject. And rejecting an agreement approved by the other 26 countries might generate substantial political backlash, so it won’t be done lightly.

      • 0 avatar

        Hey th009!

        I understand all that. What I’m thinking is that this kind of deal, pushed through by the kind of pols that are being pushed out at the moment all over Europe, could be another wedge driven into an EU whose fracture lines are becoming more relevant each and every day. A superstructure of Euro bureaucrats accountable to no one and taking decisions on behalf of a population of relatively educated and participant peoples? Can only work as long as the crumbs are falling off the table in good enough quantity. I was just wondering how long before the inevitable backlash.

        • 0 avatar

          Well, they call it “democracy” here in Europe. Long tradition. Foolproof technique, since centuries. Someone in power decides, the rest will follow. Most important point: Don’t ask them, force them. If they don’t like it blame it on “EU regulations”, which, of course, are “without alternatives”.

  • avatar

    Far as I know, people in the EU vote for candidates to the European Parliament in Brussels as well as their own. Then they have bureaucrats as adjuncts to the Brussels elected mob. This means the average citizen has two governments bossing him/her around, just like the federal systems in the US and Canada, although most people tend to pay little attention to the EU bureaucrat until they come up with edicts about how straight a banana has to be before it can be sold, or how eggs must be sold by weight. Typical ideas from people who don’t have a real job and can daydream all day.

    The UNECE regulations which Ford and Big Al from Oz think the US should adopt are another thing. Who says they’re better than US regs? All we are urged to do is join the parade, regardless. The new type approvals mean that you can’t modify your vehicle – that will go down well in North America.

    If you think manufacturers are gaming EPA mileage estimates, let alone the ridiculously optimistic Canadian ones, then the EU estimates apply only on Mars, and serious “optimizing” occurs. Noise regulations are poor, etc.

    If the best of UNECE and US schemes were thoughtfully combined, then sure go for a world standard. Otherwise, why bother?

    The following link touches on particularities of the EU regs. One commenter works for the Australian arm of Ford, and has overall the most-reasoned outlook on car design I’ve read anywhere. He feels some US tests are superior to UNECE.

    I wonder which subset of UNECE Japan does accede to, and gather from Bertel that it’s all but Kei cars. If that goes away, will the roads of Japan fill up with the giant tiny Fiat 500 TwinAir with 900cc of throbbing two cylinder power?

    I think these negotiations between Japan and the EU will drag on for years. Canada’s has. The reason is simple: the EU position is that they are correct and everyone else is wrong, therefore no negotiation is required, just do it our way.

    And a fat lot of good it has done them so far.

    • 0 avatar

      @wmba, regarding “He feels some US tests are superior to UNECE,” that discussion relates to fuel economy measurement standards, not to safety regulations like UNECE and FMVSS. Personally, I couldn’t care less about the fuel consumption measurement standards, just unify the safety regs so that we can buy the same cars worldwide.

      As for “the EU position is that they are correct and everyone else is wrong, therefore no negotiation is required, just do it our way,” this also matches the US negotiating position on any number of issues from Kyoto to trade to ICC. Basically the bigger you are, the less flexible you will believe you need to be. (And, yes, this applies to other large countries as well. You know who you are.)

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