Reps. Kaptur, Dingell lead call for protection against non-TPP nation trade manipulation
WASHINGTON, D.C.— Congresswoman Marcy Kaptur (D-OH) and Congresswoman Debbie Dingell (D-MI) led a bipartisan group of members of Congress to call on U.S. Trade Representative Michael Froman to ensure that any Trans-Pacific Partnership agreement negotiated in Atlanta this week include strong automotive rules of origin. Signatories to the letter include Representatives Alan Grayson (D-FL), Peter DeFazio (D-OR), Louise Slaughter (D-NY), Peter Visclosky (D-IN), Tim Ryan (D-OH), Brad Sherman (D-CA), Rosa DeLauro (D-CT), Dan Kildee (D-MI), Paul Tonko (D-NY), Gene Green (D-TX), André Carson (D-IN), Mark Pocan (D-WI), Donna Edwards (D-MD), John Yarmuth (D-KY), Robert Aderholt (R-AL), John Conyers (D-MI), Raúl Grijalva (D-AZ), Rubén Hinojosa (D-TX), Walter Jones (R-NC), Keith Ellison (D-MN), and Chris Van Hollen (D-MD).
Rules of origin limit the percentage of a product that can be made up of parts originating in non-TPP nations. Products that exceed the cap would not qualify for special market access provided under the TPP. Strong rules of origin prevent products, especially auto parts, mostly made in China and other non-TPP nations, from getting privileged access to the U.S. marketplace.
The full letter is included below. A PDF can be found here.
October 1, 2015
The Honorable Michael Froman
United States Trade Representative
The Office of the United States Trade Representative
600 17th Street, N.W.
Washington, DC 20508
Dear Ambassador Froman,
With Trans-Pacific Partnership (TPP) automotive issues still under negotiation, we strongly urge you to advance positions that will help the U.S. auto industry prosper now and in the future, including strong automotive sector rule of origin standards and a tariff phase-out period on Japanese cars, truck and parts. Such a policy is needed and puts the interests of working families in the United States ahead of any other we are deeply concerned that the current approach will mean that China, not the U.S., will be the primary beneficiary of the TPP auto deal.
Any final agreement must recognize the current lopsided nature of our trading relationship and lay a strong foundation for further development in our domestic auto industry, especially with the possibility additional nations will join the deal in the future. The United States must not lower our tariffs until Japan legitimately opens its market to imports. And our domestic manufacturing jobs must not be used as a bargaining chip to finalize an agreement.
The automotive industry in the United States is one of the largest globally and plays a critical role in our economy. Auto manufacturers, along with their suppliers and dealers across the country, help drive the U.S. economy and create or support skilled jobs in every congressional district. The industry supports 7.25 million U.S. jobs, including 1.55 million Americans employed directly by automakers. No other single industry is linked to so much U.S. manufacturing or generates so much retail business and employment. Given that it drives such a significant portion of the U.S. economy, it is imperative that the TPP closes loopholes in the auto rules of origin standard that allow too much content from countries that have not signed onto the obligations in the agreement, such as China.
Japan has the most closed automobile market in the developed world. It utilizes components and parts produced in non-TPP countries and is known to practice currency manipulation and other dubious trade policies to unfairly increase their exports, as do other TPP nations. Their reported effort to set the baseline for rule of origin levels at 45% for autos and an even lower threshold for parts, with significant loopholes, will allow them to continue with an undisrupted supply chain that could have a disastrous impact on the U.S. supply chain and resulting loss of American jobs in the years ahead.
As you know, prior to formally entering TPP negotiations in 2013, Japan publicly agreed to phase out U.S. tariffs on cars and trucks with the longest staging period of any product in agreement which will be back-loaded to the maximum extent. Any agreement with Japan must reflect that opening commitment. Further, this agreement must include the longest tariff phase out for cars, trucks, and auto parts, granting one but not the others are unacceptable. Auto suppliers alone produce hundreds of billions of goods and support more than three and a half million U.S. jobs directly and indirectly.
As representatives of U.S. workers and manufacturing, our goal is to improve rule of origin standards beyond those set in the North American Free Trade Agreement (NAFTA). More than 20 years of lost jobs under NAFTA reveals the need for a true 21st century agreement. We must do better under the TPP by increasing the rules of origin standards, not lowering them.
Thank you for your consideration of our views as the TPP automotive negotiations persist. We welcome the opportunity to advance the U.S. auto and auto parts industry throughout global markets, while protecting millions of jobs, workers, communities, and investments here in America.