TPP failure would cost the US trade dominance

[LeveragedBuyout]

Didn't you forget to add that we really didn't want hormone treated cattle and genetically modified crops that have never been subjected to any long(er) term testing?
Except for that one study, in which mice fed exclusively with GM products (top selling brand!) had greatly increased chances for tumors and multiple organ damage, all in a timeframe of one generation.

Also, later some rules were established, non hormone treated cattle can be sold in EU and it's sales are increasing.
Anyhow, i don't see why you are geting so upset, as a tradesman(i presume) you should know all about supply and demand. And here in the case of a certain portion of America's agricultural exports, the supply wasn't up to par. Provide better supply and demand will rise as evident from the beef sales?
Same goes for chickens and chlorine and that one dip......

EU extends deal on beef imports from US | EurActiv

Obviously, if Europeans can't get over their superstitions, TTIP will fail. I'll use the same source you did, to bypass questions of credibility:

Nothing wrong with chlorine-washed chicken, say German backers of TTIP | EurActiv

Sir @LeveragedBuyout ,

Very well written points , again, I thank you for your your well worded answers to all my inquiry. You go above and beyond my expectation explaining issues , and your mastery of economics and markets never ceases to amaze me. I had just read this now and have been waiting to reply because I wanted to research really the etiology for the almost tepid behavior of not only Japanese Government , but also the Japanese Media, in regards to the TPP talks.

As you and I know, the remarkable progress in the Trans-Pacific Partnership has been realized and only recently has the negotiation experienced a stall; due in part to Japan and the United States’ differences in basic trade agreements. The Liberal Democratic Party’s Chairman of the TPP Affairs Committee, Nishikawa Koya, recently had explained that it is the strategy of government to secure measures for sugar, wheat, rice and then to maintain the advantage within the negotations for dairy products, pork and beef. According to the TPP Affairs Committee , they wish to secure acceptable numbers that shall enable Japanese lawmakers’ promise to the people, which is to protect some farm products .

I’m sure you may already see that Japanese media have attempted to ascertain the nature of the disagreement. Some media sources have even assumed and have circulated that Japanese Government was considering special quota of imports wherein American rice imports would be given prioritization over the rice imports of other countries, some media sources have even tried to say that United States was making demands that Japan could not accept, one example was the effective exclusion of cars by taking more than 30 years to abolish tariffs on car imports.

It is understandable that the Japanese Media would correlate the issue of Gaiatsu, which basically means “Outside Pressure”, in context to the United States. The reason for this is because throughout the bilateral relations between Japan and the United States, the latter has always tried to implement Gaiatsu on Japan in order to prying open Japanese markets in bilateral and multilateral trade negotiations. In fact, in earlier times, the issue of Gaiatsu was a reality because it was used by progressive leaders especially when Japan was considered an industrial threat to the United States during the 1970s, 1980s. During earlier decades of bilateral trade friction, resolving dispute with the United States was the most important driver of Japanese trade policy; even multilateral negotiations under the GATT were accompanied by bilateral Japan – US discussions on the side. One then is left wondering, “If Gaiatsu worked so well in the past, then why is it not working so well now in the present time period?”

The answer to this is: WTO. Since Japan was part of the WTO, one method of handling any trade friction with the United States was through the WTO’s Enhanced Dispute Settlement Mechanism. By utilizing the legalized multilateral framework of the WTO, this had strengthened Japan’s bargaining leverage and bargaining power over time and had effectively weakened the US Pressure on Japan regarding any issues of trade.

A second point that I want to emphasize is that Japan no longer is considered a threat, specifically, an Industrial competitor to the United States as it once was during the 1980s. Besides the concept of Ishitsuron no longer influences negotiators from the United States.

A third issue that I want to mention is that from preliminary experience, any notion of tough stance is not taken seriously. As you remember during the preliminary consultation about Japan possibly joining the TPP negotiations in 2012, it was the United States that had announced a policy of not approving Japan’s participation in TPP talks unless all items, particularly rice and other agrarian goods were put on the negotiation table for tariff elimination. Then what happened? It then later backed off.

Japan places a significant premium on its participation on these TPP negotiations: in both strategic and trade terms. The participation of Japan only amplifies both the strategic and economic importance of the TPP for the United States. With the participation of Japan and its involvement in TPP, this enables the TPP to effectively compete with any of the China-led regional comprehensive economic partnerships that are already around, which, ironically, also involves Japan but not the United States. Absent of Japan, the TPP becomes a sideshow in the US strategic game against China and hardly the vehicle to facilitate the US rebalancing to Asia that America would like it to be. Hence, the threats to expel Japan from the TPP negotiations carry little weight. Besides, Japanese Government understands and is verily aware of the fact that TPP is hostage to any instance of discord in politics in Washington. Unless the Obama Administration has any fast-track authority from Congress, which from our understanding of the Democrats’ decreasing influence and the rising clout of Republicans in Congress and Senate, this is by no means assured. So, in our vantage point, American has to compromise , as we are willing to compromise.



Best,
@Nihonjin1051

Thank you for the comprehensive reply--I would give you a positive rating if I could, but since I can't, two thumbs up.

As far as the issue of gaiatsu and empty US threats, I can only remind you that while the US plays a large role in these negotiations, it is not the only player. And if the choice is between an agreement without Japan, or no agreement at all, I strongly suspect the US will choose the former. It would be great for all of us if Japan were included, and the biggest beneficiaries would probably be Japanese consumers, but clearly each country must weigh the costs and benefits of such an agreement, and decide for itself. If the "high standards" of TPP are deemed too costly for Japan, I suspect it will drop out by itself, without being pressured to do so.

That said, I wonder if Japan can really get a better deal from the CJK FTA, where it will be dealing with far more powerful counterparts.

 

[Audio]

Obviously, if Europeans can't get over their superstitions, TTIP will fail.

Nice reduction. You took fears of unknown consequences from digesting GM food over extended periods of time, taste, locality and ways of growth preferences and wrapped it all up in "superstitions".

I'll use the same source you did, to bypass questions of credibility:
Nothing wrong with chlorine-washed chicken, say German backers of TTIP | EurActiv
.

Ofcourse "backers" in Berlin and Brussels say this. Iirc German government still doesn't allow import.

Also, the study quoted in your article cannot be representative of the sanitation standards issue because it deals with a broader picture of TTIP. In other words, they take chlorinated chicken as necessary evil in order to unlock a bigger potential and as means to further secure jobs that depend on export to the US.

Beyond chlorinated chicken | Institut der deutschen Wirtschaft Köln (IW)

 

[LeveragedBuyout]

Nice reduction. You took fears of unknown consequences from digesting GM food over extended periods of time, taste, locality and ways of growth preferences and wrapped it all up in "superstitions".

You can't bypass it, if you use statements from "backers". Iirc German government still doesn't allow import.

So the alternative is to wait 20 years to see the results of your long-term study? That would seriously damage TTIP's prospects, unless Europe compensated the US in other areas for locking out its agricultural exports. I doubt the possibility of such an outcome.

As far as the "backers" that you dismiss, I am not in a position to judge the credibility of the German Federal Institute for Risk Assessment or the Cologne Institute for Economic Research vs. the credibility of those groups who oppose TTIP. If you have proof that these agricultural techniques are harmful to humans, I will of course read such articles or papers. I will eat some chlorine-washed chicken while I wait.

 

[Audio]

So the alternative is to wait 20 years to see the results of your long-term study? That would seriously damage TTIP's prospects, unless Europe compensated the US in other areas for locking out its agricultural exports. I doubt the possibility of such an outcome.

No, some compromise will be taken, agriculture presents very small percentage of trade anyway.

As far as the "backers" that you dismiss, I am not in a position to judge the credibility of the German Federal Institute for Risk Assessment or the Cologne Institute for Economic Research vs. the credibility of those groups who oppose TTIP.

Read above, i was editing my previous post when you replied with link and comment on the study mentioned. It deals with a broader picture.

And "backers" in quotes refers to many lobbyists in both Brussels and Berlin among other things.

If you have proof that these agricultural techniques are harmful to humans, I will of course read such articles or papers. I will eat some chlorine-washed chicken while I wait.

Paper claiming GM link with tumours republished : Nature News & Comment

As for the chicken, look, i don't mind if you do eat it, i'm sure there's nothing wrong, but try to understand from my point of view, i live in such places where we don't even have chlorinated tap water. And we can drink it too, no need to buy bottled! To be honest, for me personally, beef pumped with hormones and GM crops is more of an issue.
And i'm quite thankful that over here only one GM seed type from Monsanto was allowed. Hopefully they tested the shit out of it before approval.

 

[LeveragedBuyout]

No, some compromise will be taken, agriculture presents very small percentage of trade anyway.



Read above, i was editing my previous post when you replied with link and comment on the study mentioned. It deals with a broader picture.

And "backers" in quotes refers to many lobbyists in both Brussels and Berlin among other things.




Paper claiming GM link with tumours republished : Nature News & Comment

As for the chicken, look, i don't mind if you do eat it, i'm sure there's nothing wrong, but try to understand from my point of view, i live in such places where we don't even have chlorinated tap water. And we can drink it too, no need to buy bottled! To be honest, for me personally, beef pumped with hormones and GM crops is more of an issue.
And i'm quite thankful that over here only one GM seed type from Monsanto was allowed. Hopefully they tested the shit out of it before approval.

I suspect we will reach a reasonable solution, such as a long-term phase in, which would allow for such studied to be completed while also formalizing a way for those uncomfortable with these techniques to avoid them (i.e. labeling). TTIP is too large and too important for our two economic blocs to let it be destroyed over one issue. Importantly, Europe and the US see eye-to-eye on intellectual property and labor rights issues, so TTIP seems more likely to pass in the US without comment compared to the TPP.

 

[Audio]

I suspect we will reach a reasonable solution, such as a long-term phase in, which would allow for such studied to be completed while also formalizing a way for those uncomfortable with these techniques to avoid them (i.e. labeling). TTIP is too large and too important for our two economic blocs to let it be destroyed over one issue. Importantly, Europe and the US see eye-to-eye on intellectual property and labor rights issues, so TTIP seems more likely to pass in the US without comment compared to the TPP.

There's also that scare about that clause that would allow companies to sue governments if they brought forward health&safety laws that would harm projected earnings of said companies. Although, it was scrapped in Canada-EU agreement, so hopes are it will be scrapped here as well. Anyhow, off topic, don't wan't to hijack TPP thread!

You should even research the growing organic food market here in the United States. Where I shop, Whole Foods, they sell only organic vegetables, fruits, meats, dairy products such as cheese, egg-based, et al. So the issue of genetically enhanced foods is a big issue in the United States, and there has been a trend here for organic food sources.

Second point; its also interesting that the United States utilizes pasteurization technique for milk and other dairy products (side info: Dr. Pasteur was french!). Interestingly enough, even the French don't pasteurize their dairy foods. I realized this when I went to Paris couple of years ago. Mon Dieu! Sure there are threats of meningoencaphalitis, but the milk tastes good, lol.



PS. Here's Whole Foods Market !

Ya, i have heard of this trend in the US before. And also of the apearance of vending machines that have fruits and natural juice instead of soft drinks and chocolates in schools, courtesy of the 1st Lady! You're getting somewhere!!!

 

[Aepsilons]

Ya, i have heard of this trend in the US before. And also of the apearance of vending machines that have fruits and natural juice instead of soft drinks and chocolates in schools, courtesy of the 1st Lady! You're getting somewhere!!!

Ha Ha ! I think you're referring to this, which is found in Starbucks, btw.

Yummy, delicious goodness (tho the only caveat is that it sells at $4.99!)

 

[hans]

Rely on cheap US food is very dangerous...
Big countries with big population must feed themselves..
Otherwise they will suffer a lot

@LeveragedBuyout , ive been reading news media from US sites and it paints Japan has being being resistant towards compromise in regards to the TPP issue. I think that the stalling is due to failure to compromise in both sides, and I want to emphasize that the US side is resistant to Japanese concerns that should be addressed. Also these talks of American lawmakers threatening to "cut off Japan from talks" paints the image of America as being threatening , and will only make the Japanese lawmakers that are "sitting on the fence" become even more sensitive.Want to know your views how both our sides can get past this.


Japan, U.S. blame each other for snag in TPP talks

WASHINGTON/TOKYO —

U.S.-Japan trade talks hit a rough patch last week with both sides blaming the other for a stalemate over farm exports, a major hurdle in concluding an ambitious 12-nation trade pact.

Bilateral talks between U.S. Trade Representative Michael Froman and Japanese Economy Minister Akira Amari in Washington broke up midway through the second day.

A Japanese government source said U.S. negotiators staged a “hostage-taking” by suddenly threatening not to lift tariffs on Japanese auto parts unless Tokyo met U.S. demands on agriculture.

But a U.S. official familiar with the talks, seen as key to finalizing the Trans-Pacific Partnership (TPP) spanning a third of world trade, said negotiators acted in response to a comprehensively weak offer from Japan on farm goods.

“They have the key here. They improve their agriculture offer, we’ll improve our industrial offer,” the U.S. official said, without confirming details of what was laid on the table.

A second U.S. official said the Japanese delegation “walked out” of the talks, a charge the Japanese source denied.

Japan wants to protect sensitive goods, including beef, pork, rice and dairy, which are important to its farming sector. But with U.S. midterm elections looming, many U.S. farmers and lawmakers have warned against a deal that does not significantly open Japan’s markets and say Japan should be cut out of the talks if it does not give ground.

U.S. pork producers cheered Washington’s firm stance. “The Japanese have been, and continue to be, holding up the entire negotiation. They’ve got to fish or cut bait,” National Pork Producers Council Vice President Nick Giordano said.

U.S. President Barack Obama has said he hopes to have a TPP agreement by year-end. But many observers remain skeptical that the group’s two biggest economies can make the compromises needed, and other TPP partners are reluctant to commit to final offers until they see how the two resolve their differences.

A Japanese government source well-informed about the bilateral talks said Japan went into them prepared to do a deal and having “prepared a position that showed flexibility,” but that the United States was not prepared to engage.

“There will have to come a time that the U.S. realizes that unless they are flexible, they will not have a package, or else they (negotiations) may continue for an indefinite time,” he said.

Japan’s Nikkei business daily said Japan considered slashing beef import tariffs from 38.5% to below 20%, a level U.S. negotiators have said is unacceptable.

The U.S. official said Japan’s offer did not cut tariffs to zero, the original goal, on a significant number of goods and included rules allowing higher tariffs to be reimposed if imports rise to a certain level.

Trade experts were disappointed by the lack of progress, given that Japanese Prime Minister Shinzo Abe said he was “prepared to have an improvement of market access in a daring way”.

At a meeting with U.S. Vice President Joe Biden on Friday, Abe agreed both sides could do more on TPP and said he would go back to work to find a solution, a source briefed on the talks said.


Japan, U.S. blame each other for snag in TPP talks ‹ Japan Today: Japan News and Discussion

 

[Aepsilons]

Rely on cheap US food is very dangerous...
Big countries with big population must feed themselves..
Otherwise they will suffer a lot

I guess so. Your response is too basic for my taste. Perhaps you can go into further detail and expand more on the what constitutes suffering, as well as other independent variables.

Thanks.

 

[hans]

When I was in Japan, people told me that they import a lot of food..
Like the typical eel(鳗) fish that Japanese like are imported from China.
Yet what US produce is the low cost rice and wheat, which could be more dangerous for Japan..
If the Japanese agriculture is ruined by US, you have to beg US for food, endure the unstable of food supply, get more controlled

I guess so. Your response is to basic for my taste. Perhaps you can go into further detail.

Thanks.

 

[Aepsilons]

If the Japanese agriculture is ruined by US, you have to beg US for food, endure the unstable of food supply, get more controlled

Japan's agrigulture market is but a minor segment of the overall economy, unfortunately. This is due to the limited arable land, and thus has been the pretext for greater reliance on Japan's importation of select food items. Tho i admit that Government does subsidize the farmers and farmers' organization have some clout on politicians. This is the very reason why this is such a big issue because of local politics , in context to TPP.

When I was in Japan, people told me that they import a lot of food..

Sure, this is true.

Like the typical eel(鳗) fish that Japanese like are imported from China.

We have a diversified market and yes we import from countries like China, Russia, Vietnam, in regards to sea food.

 

[Sasquatch]

@Hu Songshan Can you please merge this thread into the main TPP thread: Chances of a TPP Agreement by Year’s End Fading

Thread has been merged, I've been busy could not respond to your posts.

 

[LeveragedBuyout]

Thread has been merged, I've been busy could not respond to your posts.

Thank you!

 

[jkroo]

Whoa, @jkroo , that's an ambitious set of questions. From the start, I need to tell you that I have no idea about #2 and #3, as I am completely unfamiliar with the CJK FTA (since the US is not involved), and I am not sure how TPP will deal with the members of ASEAN + 3 who are not party to TPP. As for the others:

1) Here is the official line from the US Trade Representative, which is quite specific:

The Trans-Pacific Partnership: Economic Benefits | Office of the United States Trade Representative

On December 10, 2013, the United States and Australia, Brunei Darussalam, Chile, Canada, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam, announced substantial progress toward the completion of the Trans Pacific Partnership (TPP) negotiations. The TPP is the most significant trade negotiation in a generation, and promises significant economic benefits for American businesses, workers, farmers, ranchers, and service providers.

According to an analysis supported by the Peterson Institute, a TPP agreement provides global income benefits of an estimated $223 billion per year, by 2025. Real income benefits to the United States are an estimated $77 billion per year. The TPP could generate an estimated $305 billion in additional world exports per year, by 2025, including an additional $123.5 billion in U.S. exports.
Number of Economies: 12 countries in total; United States, Australia, Brunei Darussalam, Chile, Canada, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam.

Market Size: 793 million consumers

Combined GDP: $28.1 trillion in 2012 (39.0% of World GDP)

U.S. Benefits from Trade with TPP Economies U.S.-TPP Trade: $1.8 trillion in goods and private services in 2012 (37% of total)

U.S.-TPP Trade Growth: Goods and services trade up 46% in the last 3 years (2009-2012)

Foreign Direct Investment From TPP Countries in the U.S.: $620.3 billion (23% of FDI stock in the United States)

TPP Foreign Affiliate Employment: 1.4 million Americans

Top U.S. Markets in TPP: Canada ($354 billion), Mexico ($243 billion), Japan ($116 billion)

Jobs Supported by Exports: An estimated 4 million jobs were supported by U.S. goods and services exports to TPP countries in 2012.

U.S. Small and Medium Sized Enterprise Exports in TPP: 97% of all goods exporting companies to TPP countries are SMEs (2011)SMEs accounted for 29% of the total value of goods exports to TPP countries in 2011

Goods Exports to TPP Countries: $689.1 billion (45% of total U.S. goods exports)Up 46 % from 2009

Key Export CategoriesGoods 2012)
Machinery ($109 billion)
Electrical machinery ($83 billion)
Vehicles ($82 billion)
Mineral fuel (oil) ($58 billion)
Plastics ($33 billion)

Manufacturing Exports: $619 billion
Up 52 % from 2009

Agricultural Exports: $59.2 billion in 2012
Up 36 % from 2009

Top Agricultural Exports: Corn ($5.7 billion)
Pork and Pork Products ($4.3 billion)
Soybeans ($3.6 billion)
Beef and Beef products ($3.3 billion)
Fresh fruit ($3.1 billion)

Services Exports to TPP Countries: $172 billion in 2012Over 27% of total U.S. services exportsUp 34% from 2009​

I should note that TPP will have some strange effects on trade as well. For example, these agreements often include a clause that says that the materials for products must come from one of the countries within the agreement, so even though the US may be purchasing jeans from Vietnam, Vietnam might be purchasing cotton to make those jeans from China. Since China is not part of the TPP, Vietnam's jeans would still face a tariff. It's unclear if that will cause Vietnam to try and source cotton from elsewhere, or if Vietnam will conclude that even with the tariff, China's cotton is so inexpensive that it's worthwhile to continue purchasing from there.

As far as the positive and negative influences on the other countries, I will have to do some research and let you know later. I've mainly been focused on the American side of things, and there are quite a few participants in TPP.

4) The current hope is that TPP will be concluded next year, so it's in the advanced stages. After it is negotiated, each participating country must pass a law recognizing TPP as a treaty with the force of law in that country. In the United States, due to the complexity of our legal process, there is a chance that even if the American trade negotiators are satisfied with the deal, Congress will derail the agreement by attempting to amend it before passing it (i.e. trying to add exceptions for special interest groups). Unlike previous major trade deals, Congress never gave the President so-called "fast track" authority, which means the ability to present a deal to Congress to vote on, either yes or no, without adding amendments. The mistrust between Congress and the President means that there is no guarantee that the US will actually ratify TPP even after the negotiations are done.

Thank you for your reply. I have prepared some data to research the TPP impacts on the economy of China.

As I know, originally, TPP was planned to start up at the end of 2013. It seems that it delayed again.

With no doubt, China will be the exclusive country to TPP again. It could be predicted that US will definetely take some measures to restrict China economic influences when the entity size reach 60% of USA(hints for Chinese member, Prof. 金灿荣.)

I studied some GDP, consumption, export and import figures and try to observe our counter measures carrying on and propose my suggestions. Its time consuming work that I dont do it again for years. Now I cant find some solid proof/figure of exported products/services structure hence the transforming structure cant be concluded. It still need more time. Maybe I will post it later if I figure it out.

But I found that we are doing the right thing.
1. Talk with countries for FTA peer to peer.
2. Upgrade economy structure and improve domestic consumptions.
3. Build more FTZ in seashore cities.
4. Strenthen economy relationship ties with EU and Russia.
5. Participate more economy development programs in Africa and south American.

I am too busy in the recent, I'd like to discuss the economic issues later.

 

[LeveragedBuyout]

Mexico, Vietnam could be key trade hubs under TPP - Nikkei Asian Review

November 4, 2014 7:00 pm JST
Mexico, Vietnam could be key trade hubs under TPP
YASUHIKO OTA, Nikkei senior staff writer

Representatives at the ministerial-level talks on the Trans-Pacific Partnership attend a joint press conference in Sydney on Oct. 27. © Kyodo

TOKYO -- Of the 12 countries hoping to sign the Trans-Pacific Partnership agreement, Japan and the U.S. account for around 80% of total gross domestic product, so the negotiations between Japan and the U.S. naturally draw the most international attention.

Participants in the October ministerial-level talks on the TPP in Sydney expressed concern about the standoff between Tokyo and Washington, which are still wrangling over liberalizing trade in their key exports. But focusing too much on the talks between Japan and the U.S. risks missing the bigger picture, particularly for Japan, as two other TPP members -- Mexico and Vietnam -- have the potential to transform Japan's trade relations with countries in the Asia-Pacific.

"Please invest more in Japan as well," Prime Minister Shinzo Abe half-jokingly told Nissan Motor Vice Chairman Toshiyuki Shiga when they met during their visit to Mexico in July.

Within two years, Nissan expects to make 1 million cars a year in Mexico; Japan will by then have fallen to No. 3 in terms of output for the Japanese carmaker, behind China and Mexico. Shiga, who was hobnobbing with Mexican business leaders, could do little but smile wryly.

Mexico makes it

Nissan's Mexican plants will become much more important to Nissan when the TPP takes effect, thanks to the country's low production costs. Twenty years after the North American Free Trade Agreement, or Nafta, welded the economies of Mexico, Canada and the U.S. together, the TPP promises to flatten trade barriers between Mexico and the rest of the Pacific Rim.

One likely destination for Mexican exports is Vietnam, a potentially lucrative market with a population of 91.7 million, more and more of whom are entering the middle class. If Vietnam scraps its 50% import tariff on cars, Japanese automakers will find it easy to export to the country, both from Japan and Mexico.

Meanwhile, the Association of Southeast Asian Nations is working to create a single market for its members by 2015. Once that is done, the 10 members could strengthen their trade links to Nafta via Vietnam and Malaysia, which are part of the TPP.

Traders against free trade

Japan is digging in its heels in its negotiations with the U.S. to protect key agricultural products including rice, meat, dairy and sugar, but it is unclear in what it wants from Washington in return. There has been much talk about the U.S. auto market, but the levy on imported cars is just 2.5% in the U.S., an amount that is often swamped by changes in foreign exchange rates.

This raises the question why Japan is not making more of a fuss over Vietnam's much steeper tariff on autos. The answer has to do with the greater competition the TPP will help create: If Mexico and Vietnam embrace free trade, non-Japanese automakers will also benefit. Germany's Volkswagen manufactures in Mexico, as do automakers from the U.S. and South Korea. Companies whose home countries are not TPP signatories thus also expect to boost sales to Vietnam.

Several Japanese carmakers set up operations in Vietnam ahead of their U.S. and European rivals. Toyota Motor builds 35,000 cars a year there and Honda Motor turns out roughly 10,000. These companies may prefer to shelter behind high tariff walls. It is not yet clear how long Vietnam will be allowed to retain its tariffs under the TPP.

The outcome of the TPP talks could also affect competition among Japanese automakers. The location of factories and when to start selling where will become even more critical. The ability to come up with creative supply and sales strategies will take on greater importance as the countries involved in the TPP talks move closer to an agreement.