After Japan TPP entry, USTR asks for economic impact study

After Japan TPP entry, USTR asks for economic impact study

By Bill Donahue

Law360, New York (May 02, 2013, 5:18 PM ET) — The U.S. trade representative asked the U.S. International Trade Commission on Tuesday to investigate the likely economic effects of allowing duty-free imports of products from Japan, which just recently joined the ongoing talks for the Trans-Pacific Partnership.

In a letter to the ITC, acting USTR Demetrios Marantis asked the trade agency to consider what impact removing all duties on imported Japanese products would have on both domestic industries and on U.S. consumers.

The request came just nine days after the 11 countries then negotiating the TPP — the U.S., Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Vietnam and Singapore — gave the final greenlight for Japan to formally join the talks.

The island nation is the world’s third-largest economy by GPD and represents a major addition to the planned free-trade zone, but U.S. lawmakers have expressed concerns about unfettered imports from a country that heavily restricts access to its own market for foreign carmakers and other companies.

Tuesday’s letter asked that the ITC study all 97 chapters of products listed under the U.S. Harmonized Tariff Schedule that still have tariffs under existing World Trade Organization pacts and pre-existing free trade agreements. The trade rep also wants an additional report on agriculture-only products.

USTR also told the ITC to assume that all nontariff barriers would also be removed, and to note any instance in which the assessment for removing duties would vary if the nontarriff measure remained in place.

The trade rep requested similar studies when other countries have been added to the TPP talks, like when Canada and Mexico joined last summer, and Tuesday’s letter was careful to note that ITC didn’t need to re-analyze research for the other TPP countries.

The letter asks for the study to be submitted by August.

The 17th and latest round of TPP talks are set to kick off in Lima, Peru, on May 15. With the addition of Japan, the proposed deal will cover more than 700 million people and boast a combined gross domestic product of more than $25 trillion.

Prime Minister Shinzo Abe announced Japan’s intention to join TPP talks at a press conference March 15, saying that doing so was in Japan’s best interest and that the deal could boost the country’s gross domestic product by as much as 0.66 percent.

The move required approval of all 11 countries then involved, which Japan received from the U.S. on April 12.

"The United States and Japan have successfully completed these consultations by concluding a robust package of actions and agreements with Japan in the automotive and insurance sectors, as well as other nontariff measures," Marantis said in a statement at the time.

All 11 countries backed Japan’s entry in a joint statement April 21. It was not immediately clear whether Japan will actually be involved in the Lima talks.

The ITC pre-investigation case file is U.S.-Trans-Pacific Partnership Free Trade Agreement including Japan: Advice on the Probable Economic Effect of Providing Duty-Free Treatment for Imports, docket number 131-038, in the U.S. International Trade Commission.

— Editing by Lindsay Naylor.

source: Law 360