American-made vehicles account for four out of the 10 best-selling vehicles in America, according to DailyFinance.com. The remaining six slots are dominated by the Japanese automakers. The Toyota Camry, Honda Accord, Honda Civic, Nissan Altima, Toyota Corolla/ Matrix, and the Honda CRV represent Japan’s best-selling vehicles in the United States, as IBTimes and Reuters highlight. With the impending Trans-Pacific Partnership, you can expect to see a few more Japanese automobiles at your local dealership.
The Trans-Pacific Partnership
The Trans-Pacific Partnership (TPP) free-trade agreement is one of the largest and most significant trade agreements to be drafted in this generation, according to FAS.org. Involving 12 different nations, the TPP or Asia-Pacific free trade deal looks to lower trade barriers on a long list of products including automobiles. The most recent nation to enter the agreement was Japan, which entered the agreement looking to help its economy rebound from states of deflation.
As a part of the agreement, the two largest economies involved in the agreement, United States and Japan, are working to settle a few longstanding issues, which include U.S. access to Japanese insurance markets and automotive issues, according to IBTimes. In particular, Japan has objected for several years to U.S. tariffs on Japanese vehicles and the high duties that are placed on Japanese trucks. As a result, Japan and the United States are working toward a plan to effectively phase out the U.S. tariffs that are placed on Japanese vehicles progressively. In anticipation of the outcome of the TPP, according to the Wall Street Journal, Japan has already motioned to double the number of vehicles that can be shipped to the United States under a preferential program.
Considering that Japan’s automotive import tariff is already at 0 percent, it would seem that Japan would be teeming with all sorts of import vehicles. In spite of Japan’s 0 percent tariff, the country is one of the most closed automotive markets in the world with 94 percent of its market being dominated by Japanese-made vehicles, according to Detroit News. The Japanese domestic domination can be heavily attributed to the Japanese government and the Bank of Japan’s practice of currency manipulation. Since currency values greatly influence the outcomes of international trade, Japan’s practice of devaluing its currency results in a penalty on the imports from around the world. In addition, the Japanese currency manipulation results in the unfair subsidization of its exports and the protection of its home turf.
Free Trade Should Mean Level Playing Field
The automotive industry is the largest exporter in the United States and strongly supports all notions of free trade. Just recently, the Ford Focus was named the best-selling vehicle in China for the month of September, IB Times reported. With an emerging Chinese automotive industry, it’s clear that American vehicles can compete internationally when the playing field is level. However, American automakers feel that if Japan’s practice of currency manipulation isn’t addressed, the TPP would just mean more Japanese vehicles on American car lots without opening the borders of Japan.
Regardless of the outcome of the TPP, Japanese vehicles have made notable strides in American markets. With the Toyota Camry being the best-selling sedan in America for 15 of the last 16 years, Japanese vehicles are commonly recognized for their longevity. Whether it’s Drivetime Cars or any other automotive dealer, you can expect to see an abundance of Toyota, Nissan, Infiniti, Honda, Acura, and Lexus vehicles featured on many dealerships’ front line. In 2012, the Japanese automotive industry was responsible for 1.36 million jobs in the United States according to Reuters, which makes it one of the largest job producers in the U.S. The long-standing and mutually beneficial relationship between the U.S. and Japanese automakers suggests that the TPP may or may not be the reason you will be seeing more Japanese vehicles on American car lots.
Carol Daniels is a sports fanatic from Portland.