Australia Sugar Industry Alliance supports Japan entry to Trans Pacific Partnership negotiations

Media Release: Australian Sugar Industry Alliance

Japan the next to open trade with Australia?

Australian sugar has welcomed news that Japan is considering entry to the Trans Pacific Partnership Agreement (TPP).

According to the Australian Sugar Industry Alliance, Japan is a longstanding trading partner of the Australian sugar industry. Japan has the reputation of having one of the most protected agricultural and sugar sectors in the world.


"It is important that Japan comes to the negotiations with a strong commitment to the TPP's underlying principles; it must be a comprehensive agreement that delivers commercially meaningful trade outcomes, including for sugar," says Alf Cristaudo, Chairman of ASA.


"This must address the rules of origin that facilitate trade and there must be NO exclusions. Japan must accept progress made to date, with no back trading," he says.

The Australian Sugar Alliance says it is important that Japan's entry does not stand in the way of the timely development of a TPP agreement which facilitates the development of agricultural trade and strengthens production and supply chains throughout the region.

"By eliminating import tariffs, levies and surcharges and other import barriers including quotas, the TPP can improve market outcomes for the region's efficient producers, expand consumer choices, enhance competitiveness, strengthen supply chains and improve the Asia-Pacific region’s food security," says Cristaudo.

"The challenge for TPP negotiators is to break the shackles of protectionism to unleash trade – the most powerful driver of economic growth and development on the planet."

March 21, 2013 |www.sugar.ca|

Japanese carmakers have to put quality and safety first in supply chain contracts

By Daniel Hunter

Supply chain expert Mark Johnson believes Japanese carmakers have been slow to react and should put quality and safety first in negotiating contracts with suppliers.

Toyota, Honda, Nissan and Mazda have had to recall 3.4 million vehicles across the world because of faulty airbags supplied by Takata Corp, which are at risk of catching fire or injuring passengers.

It has been reported that the problem was first raised in October 2011 and the issue again shows how risky huge global supply chains are.

Dr Johnson, Associate Professor of Operations Management at Warwick Business School, says firms should not just look at cost when considering their supply chain.

“Perhaps the answer to this is to put quality and safety first when negotiating contracts for safety critical parts,” said Dr Johnson.

“As more and more firms focus on what they are good at – their core competences – then their suppliers will be trusted for greater proportions of the design and manufacturing of sub-systems and components.

“This comes with a cost, and that is the loss of control of their supply chains as they cede responsibility to their suppliers while procuring parts at a low price.

“It is unlikely that carmakers will ever bring certain things – airbags being a prime example – in-house, it’s simply not in their interest as costs are already competitive and they need to find new ways of managing the relationship so that they can have visibility of any issues.

“This means moving to contracts based on relationships – which give transparency into operations – as opposed to those where price is the be-all and end-all.

“Takata have paid the price in a reduced share price and will no doubt find themselves under pressure when contracts are negotiated. Toyota, and others, will pay the price through an expensive, and public, recall.”

But Dr Johnson believes if the car manufacturers had acted quicker they could have lessened the damage to their brand.

“The age of the affected vehicles suggests that this is something that was known previously and the carmakers have been slow to respond,” said Dr Johnson.

“The blame has been firmly placed on Takata, who saw a slump in their share price.

“Swift resolution of a fault can be beneficial, after all firms can be viewed in a positive light if they act swiftly and decisively when customers perceive there to be a risk.”

 12/04/2013 |www.internationaltrade.co.uk|

Japan, U.S. agree on Tokyo joining Trans-Pacific trade talks

By  Kaori Kaneko and Doug Palmer

(Reuters) - Japan and the United States on Friday agreed on a deal paving the way for Tokyo to join talks on an Asia-Pacific free trade agreement, increasing the economic weight of the proposed pact and triggering a loud protest from U.S. automakers.
The deal brings Japan closer to entering talks on the Trans-Pacific Partnership (TPP), which the United States, Canada, Mexico, Peru, Chile, Vietnam, Malaysia, Singapore, Brunei, Australia and New Zealand hope to finish this year.

"I think Japan's national interests are protected under this U.S.-Japan agreement," Japanese Prime Minister Shinzo Abe told reporters on Friday after a meeting with Cabinet ministers.
Abe, who took office in December, is making the regional free trade pact a keystone of his strategy to open Japan's economy and spur long-sought growth. He is pursuing the agreement, despite fierce opposition from Japan's politically powerful farm lobby, as part of a "third arrow" in his "Abenomics" policy triad, after fiscal spending and drastic monetary policy easing.
President Barack Obama's administration sees the TPP as part of U.S. economic rebalancing toward Asia.

"Having Japan in TPP and contributing to the high standards of TPP is good for the U.S., it's good for the Trans-Pacific Partnership as a whole and its very good for the multilateral trading system itself," Mike Froman, White House international economic affairs adviser, told reporters in Washington.
With the entry of Japan, the world's third-largest economy and fourth-largest U.S. trading partner, the final TPP pact is expected to cover nearly 40 percent of global economic output and one-third of all world trade, Froman said.

The United States also plans to launch free-trade talks with the 27-nation European Union in coming months. With world trade talks dead in the water, regional initiatives have become the main forum for trade liberalization.
The TPP talks have been under way for three years and Japan hopes to participate in the negotiations beginning in July. But that requires a formal decision by all 11 countries currently taking part in the talks. The U.S.-Japan agreement was applauded by the U.S. Chamber of Commerce and the Business Roundtable, but it got a chilly reaction from Detroit-based automakers that have lost substantial market share to Japanese competitors over decades.

AUTO INDUSTRY CONCERNS

Ford Motor Co has fought hard to keep Japan out of the pact, arguing the U.S. ally has repeatedly failed to follow through on promises to import more cars, and that the Japanese government has been driving down the value of the yen to help its automakers export more cars.
"It is stunning that the U.S. government would endorse a trade policy that puts the industry at a competitive disadvantage and comes at the cost of American auto jobs," Matt Blunt, president of the American Automotive Policy Council, said in a statement on the U.S.-Japan deal. "We urge the administration to reconsider its position."

The United Auto Workers said it was concerned that U.S. government efforts that helped the U.S. auto industry recover in recent years "could be threatened by Japan's entry into Trans-Pacific Partnership (TPP) negotiations."

"Despite decades of efforts by Japan's trading partners to open the Japanese market to imported automobiles, Japan remains the most closed automotive market in the world, with import penetration of less than 6 percent, despite a Japanese automotive import tariff that is already at zero percent," the union group said.

Powerful U.S. lawmakers from Michigan, the traditional heart of the U.S. auto sector, also expressed concern. Representative Dave Camp, the Republican chairman of the House of Representatives Ways and Means Committee, said he would not support Japan's entry into TPP without "airtight assurances" it will address longstanding barriers to U.S. auto, insurance and agricultural exports.
Representative Sandy Levin, the top Democrat on the Ways and Means Committee, who is also from Michigan, said the deal announced on Friday "does not provide an adequate basis for Japan's entry into the Trans-Pacific Partnership."

Levin vowed to use the next several months to push for tougher preconditions for Japan to join the talks. U.S. trade officials said Tokyo agreed to a separate set of negotiations, in parallel with the TPP talks, focused on a number of regulatory and non-tariff barriers believed to keep U.S. autos out of the Japanese market.

"For the first time ever, we have the opportunity to negotiate a resolution of these issues in a way that is subject to binding and enforceable dispute settlement," Acting U.S. Trade Representative Demetrios Marantis said.

Japan also agreed the United States could phase out its auto tariffs, which are 2.5 percent on cars and 25 percent on trucks, over the longest period possible in the future TPP deal. Levin criticized the commitment in that area, saying any phase-out of the U.S. tariffs should be linked to measurable improvement in sales of U.S. cars in Japan.

The Japanese Automobile Manufacturers Association welcomed Friday's announcement, but said the protracted process for eliminating U.S. tariffs was "regrettable." "We look forward to the Japanese government's entering the TPP negotiations on a sure footing of promoting national interests and taking into account the views of our industry," said Akio Toyoda, the group's chairman.

Tokyo also pledged to expand its "preferential handling procedure" for imports, a simpler and faster certification method used by U.S. auto manufacturers to export to Japan. That would allow U.S. companies to export up to 5,000 vehicles of each type of vehicle under the program, compared with the current annual ceiling of 2,000 for each vehicle type.

The White House still needs to give Congress 90-days notice before formally beginning talks with Japan. Marantis said it was premature to say when that would happen since some other TPP countries still have outstanding issues with Japan. New Zealand Trade Minister Tim Groser said last month the TPP member nations could formally decide whether to allow Japan into the talks when trade officials gather in Indonesia on April 20-21 for the annual meeting of the 21-member Asia-Pacific Economic Cooperation forum.

(Additional reporting by Ben Klayman in Detroit; Editing by Linda Sieg, Edmund Klamann, Nick Zieminski and Xavier Briand)

       
|Americaneconomicalert.org |TOKYO/WASHINGTON | Fri Apr 12, 2013 7:34pm EDT