DEARBORN - The Trans-Pacific Partnership (TPP) is designed to enhance trade and investment among the TPP partner countries, promote innovation, economic growth and development and support the creation and retention of jobs. The TPP currently includes eight countries in addition to the United States – Australia, Brunei Darussalam, Chile, Malaysia, New Zealand, Peru, Singapore and Vietnam. Two other countries – Canada and Mexico – have recently been invited to join the negotiation.
@Ford recently discussed TPP and its importance to Ford with Steve Biegun, vice president, International Government Affairs.
Q. Why should Ford employees care about TPP?
A. Free trade is one of the foundations of our business model at Ford. We understand its value and have supported every free trade agreement approved by Congress. For nine of the last ten years, the automotive sector has been the largest goods exporter in the U.S. economy. Automotive goods – including vehicles and vehicle parts –constitute a greater portion of U.S. exports than any other goods, including those from the aerospace industry.
This year, Ford Motor Company will export more than 300,000 vehicles from the U.S. and we also import an enormous amount of automotive parts and vehicles into the U.S. market. As a result, Ford ranks among the largest importers and exporters in the country. Free trade negotiations are very important to us, and ones that have been done well in the past have created real commercial opportunities for Ford. TPP offers such an opportunity for Ford to export more American-made cars and trucks.
Q. From Ford’s perspective, what is the main issue right now impacting TPP?
A. Ford strongly supports the TPP with the existing countries, and believes it will deliver real benefits for the company. But adding a protectionist market like Japan will indefinitely delay progress on this important trade deal.
Japan simply is not a free-trading country. Even though it has no tariffs on autos, it manages to keep all other imports – from the U.S., Canada, Mexico, Europe and Asia – to just 5 percent of the entire Japanese market. This doesn’t happen by accident. Japan’s entire economic model is based upon one-sided trade, which is bolstered by its long history of manipulating its currency to subsidize Japanese imports to the U.S. This is why America has a $40 billion automotive trade deficit with Japan.
The American auto industry went through a tough restructuring, and we are stronger now. But Japan’s auto industry has not done the hard work we had to do to remain globally competitive. It is currently being propped up by unfair government policies in Japan. It’s the wrong time to be bailing out the Japanese auto industry with a one-sided trade agreement that jeopardizes the U.S. auto recovery.
For every one American car that is exported to Japan, 150 Japanese cars are imported to the U.S. We need a level playing field where we can compete on even terms. By further opening our market in the U.S. without insisting first on reforms in Japan, we are locking in one-way, unfair trade. Manufacturing is driving our country’s economic recovery. The last thing we should do is undo that progress.
Q. In your opinion, what does Japan need to do before being added to TPP?
A. We believe TPP membership can be an incentive for countries to reform in advance of joining. Our government should insist on opening markets in Asia to American manufactured goods, not rewarding a country that doesn’t play by the rules. Japan should only be considered as a candidate for TPP in the future after it has demonstrated a multi-year track record of opening its domestic markets to U.S. exports from key sectors of our economy, including autos.
Q. Why is this so important to Ford?
A. Ford went through a critical transformation that has positioned us for the profitable growth necessary to be globally competitive, including a competitive agreement with our UAW partners. Our workforce and products can successfully compete with anyone in the world as long as there is a level playing field. That competitive edge in the U.S. is jeopardized by a trade deal that locks in one-way trade with Japan and further exacerbates the $40 billion trade deficit in autos.